Rights of unpaid seller

Question 1

PYQ 1.0 marks

How many persons are required to form a contract?

A A) one B B) two C C) two or more D D) four

Why: A contract requires two parties: the promisor and the promisee. Under Section 2(b) of the Indian Contract Act, 1872, a contract is an agreement enforceable by law, which necessitates at least two competent persons exchanging offer and acceptance with consideration. A single person cannot form a contract with themselves. Thus, option B is correct.[2]

Question 2

PYQ 1.0 marks

Where is the definition of the term 'Contract' enshrined under the Indian Contract Act, 1872?

A A) Section 2(a) B B) Section 2(b) C C) Section 2(d) D D) Section 2(h)

Why: Section 2(h) of the Indian Contract Act, 1872 defines 'contract' as 'an agreement enforceable by law'. Section 2(e) defines 'agreement' as every promise and every set of promises forming consideration for each other. This forms the basis of contract formation involving offer, acceptance, and consideration. Option D is correct.[2]

Question 3

PYQ 1.0 marks

How can the acceptance of the proposal be made?

A A) by notice of acceptance B B) by performance of condition of proposal C C) by acceptance of consideration for a reciprocal promise D D) by performing conditions or receiving consideration

Why: Under Section 8 of the Indian Contract Act, 1872, acceptance can be by performing conditions of the proposal or by receiving consideration for a reciprocal promise. This covers both express and implied acceptance in contract formation. Options A, B, C are partial; D is comprehensive and correct.[2]

Question 4

PYQ 1.0 marks

________________ is absolute and capable of converting an agreement into a contract

A A) Invitation to offer B B) Offer C C) Acceptance D D) all the above

Why: Acceptance under Section 2(b) read with Section 7 of the Indian Contract Act converts an agreement into a contract by creating mutual assent. Offer alone or invitation to offer does not suffice without acceptance and consideration. Thus, acceptance is absolute for enforceability. Option C is correct.[2]

Question 5

PYQ 1.0 marks

A valid proposal can be made in which of the following manner?

A A) words (written only) B B) words (written or spoken) C C) words D D) a letter

Why: Section 3 of the Indian Contract Act, 1872 provides that communication of proposal (offer) can be by words (spoken or written) or conduct. This enables formation of contract through various modes. Option B accurately captures this.[2]

Question 6

PYQ 1.0 marks

When the offeree makes modifications and variations in the terms of the original offer, he is said to have made a:

A A) cross offer B B) counter offer C C) general offer D D) continuing offer

Why: A counter-offer under Section 6(1)(a) read with general principles rejects the original offer and proposes new terms, terminating the original offer. This distinguishes it from cross offer (independent offers) or continuing offer. Option B is correct.[2]

Question 7

PYQ 1.0 marks

In a contract for the sale of goods, a stipulation essential to the main purpose of the contract is known as:

A A. Condition B B. Warranty C C. Representation D D. Term

Why: Under Section 12(2) of the Sale of Goods Act, 1930, a condition is a stipulation which is essential to the main purpose of the contract. Breach of condition allows the buyer to repudiate the contract and claim damages. Warranty under Section 12(3) is collateral to the main purpose, breach of which only entitles to damages. Thus, option A is correct as it matches the definition of condition[1].

Question 8

PYQ 1.0 marks

In case of transfer of property the seller is:

A A. not entitled to rents and profits of the property till the ownership thereof passes to buyer B B. is entitled to rents and profits of the property till the ownership thereof passes to buyer C C. is entitled to rents or other profits D D. none of these

Why: Under Section 55(4)(a) of the Transfer of Property Act, 1882, in the absence of a contract to the contrary, the seller is entitled to the rents and profits of the property until the ownership (property) passes to the buyer. This rule governs the passing of benefits before property transfer. The correct option is B as it directly matches this provision.[1]

Question 9

PYQ 1.0 marks

Which of the following statements is true regarding rights of the seller under the Transfer of Property Act, 1882?

A A. The seller is entitled to the rents and profits thereof till the ownership thereof passes to the buyer B B. Right to demand that the mortgagee at his cost, should transfer the mortgaged property to the mortgagor C C. Either A or B D D. Neither A nor B

Why: Section 55(4)(a) explicitly provides that the seller is entitled to rents and profits until ownership passes to the buyer. Option B relates to mortgagor rights under Section 60, not seller rights in sale. Thus, only A is correct for seller's rights on property transfer and passing of benefits.[1]

Question 10

PYQ 1.0 marks

In a contract of sale, if there is excess delivery (more than the contracted quantity), the buyer can:

A A. Reject in full B B. Accept the contract quantity and reject the excess C C. Accept the whole D D. Either (A), (B) or (C)

Why: Under the Sale of Goods Act, 1930, in cases of excess delivery beyond the contracted quantity, the buyer has the discretion to either reject the entire delivery, accept only the contracted quantity and reject the excess, or accept the whole quantity. This flexibility protects the buyer's right to insist on the exact terms of the contract while allowing acceptance if beneficial. Section 37 supports the buyer's remedies for breach of quantity terms. Therefore, option D is correct as it encompasses all possible actions available to the buyer.

Question 11

PYQ 1.0 marks

The main object of contract of sale is:

A A. Payment of price B B. Delivery of goods C C. Transfer of property D D. Transfer of possession of goods

Why: The primary object of a contract of sale under Section 4 of the Sale of Goods Act, 1930, is the **transfer of property** in goods from the seller to the buyer for a price. While delivery (transfer of possession) and payment are important obligations, they are secondary to the passing of property, which determines ownership, risk, and rights. Transfer of possession may occur without property passing (e.g., bailment), but the essence of sale is property transfer. Thus, option C is correct.

Question 12

PYQ 1.0 marks

A consideration in contract of sale must be ______________ only.

A A. Goods B B. Movable only C C. Price D D. Purchase

Why: Section 4 of the Sale of Goods Act, 1930, defines a contract of sale as involving the **transfer of property in goods for a price**. The consideration must be **price** (money consideration), distinguishing sale from barter or exchange. Goods are the subject matter, not the consideration; movability relates to goods definition (Section 2(7)); purchase is the transaction outcome. Thus, option C is correct.

Question 13

PYQ 1.0 marks

The term 'Unpaid Seller' has been defined in which section of the Sale of Goods Act, 1930? A. Section 44 B. Section 45 C. Section 46 D. Section 47

A Section 44 B Section 45 C Section 46 D Section 47

Why: The term 'Unpaid Seller' is defined under **Section 45** of the Sale of Goods Act, 1930. According to this section, a seller is deemed unpaid when the whole price has not been paid or tendered, or when a negotiable instrument like a bill of exchange is dishonoured. Section 44 deals with sub-sale or pledge by buyer, Section 46 outlines unpaid seller's rights, and Section 47 specifies the lien. Thus, option B is correct.[5]

Question 14

PYQ 2.0 marks

What rights does an unpaid seller have against the goods? A. Right of lien B. Right to sue for specific performance C. Right of resale D. Right of stoppage of goods in transit E. Right to reorganise possession of goods Choose the correct answer from the options given below:

A Right of lien B Right to sue for specific performance C Right of resale D Right of stoppage of goods in transit

Why: An unpaid seller has **rights against the goods** including: **Right of lien** (retain possession until payment, Sec. 47-49), **right of resale** (sell goods again under certain conditions, Sec. 54), and **right of stoppage in transit** (stop goods if buyer insolvent, Sec. 50-52). Right to sue for specific performance (B) and right to reorganise possession (E) are personal remedies against the buyer, not against the goods. Thus, correct options are A, C, D.[4]

Question 15

PYQ 1.0 marks

Which of the following is NOT a remedy available for breach of contract under the Indian Contract Act, 1872? A. Damages B. Specific Performance C. Rescission D. Quantum Meruit

A Damages B Specific Performance C Rescission D Quantum Meruit

Why: Under the Indian Contract Act, 1872, primary remedies for breach include damages (Sections 73-75), quantum meruit (Section 70), and rescission (Section 39). Specific performance is provided under the Specific Relief Act, 1963, not directly under the Contract Act. Thus, option B is not a remedy under the Indian Contract Act[1][2].

Question 16

PYQ · 2011 1.0 marks

In a sale of goods by auction, as soon as the hammer falls, the goods:

A become the property of the buyer only on payment of price B become the property of buyer even if there is a condition that the goods shall not be removed before payment C become the property of the buyer only if there is no condition that the goods shall not be removed before payment D do not become the property of the buyer however, the bidder is vested with the right to deal with them as owner

Why: Under Section 64(3) of the Sale of Goods Act, 1930, the sale in an auction is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner. At this moment, the property in the goods passes to the highest bidder, regardless of any condition regarding payment or removal of goods. This is irrespective of payment; the buyer becomes the owner immediately upon the fall of the hammer[2][3]. Option B correctly states this principle.

Question 17

PYQ 1.0 marks

In an auction sale, if the seller makes use of pretended bidding to raise the price, then:

A sale is voidable at the option of the seller B sale is void C sale is voidable at the option of the buyer D the buyer is not required to pay the excess amount charged by the seller

Why: Section 64(6) of the Sale of Goods Act, 1930, provides that if the seller makes use of pretended bidding to raise the price, the sale is voidable at the option of the buyer. Pretended bidding involves fake bids by the seller or agents to artificially inflate the price, misleading genuine bidders. The buyer has the right to avoid the contract, but the sale is not void ab initio[2][5]. Option C matches this provision.

Question 18

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Which of the following best defines the formation of a contract of sale under the Sale of Goods Act?

A An agreement between two parties where one transfers ownership of goods for a price B A promise to sell goods at a future date without consideration C An agreement to exchange services for goods D A contract where goods are given as a gift without payment

Why: A contract of sale involves an agreement where ownership of goods is transferred from seller to buyer for a price, which is the essence of sale under the Sale of Goods Act.

Question 19

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Which section of the Sale of Goods Act, 1930 defines a 'contract of sale'?

A Section 2(1) B Section 4 C Section 10 D Section 6

Why: Section 2(1) of the Sale of Goods Act, 1930 defines a contract of sale as an agreement whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.

Question 20

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Which of the following is NOT essential for the formation of a valid contract of sale of goods?

A Offer and acceptance B Consideration C Free consent D Registration of contract

Why: Registration is not required for the formation of a contract of sale of goods. Essential elements include offer, acceptance, consideration, and free consent.

Question 21

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In the context of contract formation, what is the legal effect of a 'counter-offer'?

A It accepts the original offer B It rejects the original offer and proposes a new offer C It modifies the original offer without rejection D It terminates the contract immediately

Why: A counter-offer rejects the original offer and proposes a new offer, which must be accepted for a contract to be formed.

Question 22

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Which of the following statements about the formation of a contract of sale is correct?

A A contract of sale can be formed without consideration B A contract of sale requires the transfer of ownership immediately C An agreement to sell is a contract of sale D A contract of sale requires an offer, acceptance, and consideration

Why: A contract of sale requires offer, acceptance, and consideration. An agreement to sell is distinct and not a contract of sale until ownership passes.

Question 23

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In a contract of sale, the term 'offer' means:

A A definite proposal made with the intention to be bound B A mere invitation to negotiate C A statement of future intention D An acceptance of terms

Why: An offer is a definite proposal made with the intention that it shall become binding as soon as it is accepted by the person to whom it is made.

Question 24

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Which of the following is an example of a valid offer in a contract of sale of goods?

A Seller states: 'I am thinking of selling my car.' B Seller states: 'I will sell you my car for \( \text{₹} 5,00,000 \) if you accept by tomorrow.' C Seller advertises: 'Car for sale, price negotiable.' D Seller says: 'I might sell my car next month.'

Why: A valid offer must be definite and show intention to be bound. The seller's statement with a fixed price and time for acceptance qualifies as a valid offer.

Question 25

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When does an offer lapse under the Sale of Goods Act?

A When the offeror revokes it before acceptance B When the offeree rejects the offer C When a counter-offer is made D All of the above

Why: An offer lapses if revoked before acceptance, rejected by the offeree, or a counter-offer is made, as these terminate the original offer.

Question 26

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Which of the following is NOT a valid mode of acceptance in a contract of sale?

A Express acceptance communicated orally B Acceptance by conduct C Acceptance by silence without prior agreement D Acceptance by written communication

Why: Silence cannot amount to acceptance unless there is a prior agreement or established practice to that effect.

Question 27

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In the Sale of Goods Act, acceptance is said to be complete when:

A The offeree signs the contract B The acceptance is communicated to the offeror C The goods are delivered D The price is paid

Why: Acceptance is complete when it is communicated to the offeror, thereby creating a binding contract.

Question 28

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A buyer sends an acceptance letter by post. The contract is formed when:

A The letter is posted B The letter is received by the seller C The buyer receives acknowledgment D The seller delivers the goods

Why: According to the postal rule, acceptance is complete when the acceptance letter is posted, not when received.

Question 29

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Which of the following statements about consideration in a contract of sale is true?

A Consideration must be adequate but need not be sufficient B Consideration must be sufficient but need not be adequate C Consideration is not required in contracts of sale D Consideration must be in writing

Why: Consideration must be sufficient in law but need not be adequate in value; the law does not require equal exchange.

Question 30

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Which of the following is NOT valid consideration in a contract of sale of goods?

A Payment of money B Promise to pay money in future C Past voluntary act without expectation of reward D Exchange of goods

Why: Past voluntary acts without expectation of reward do not amount to valid consideration.

Question 31

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In a contract of sale, if the buyer agrees to pay a higher price than originally agreed without any new consideration, the agreement is:

A Valid and enforceable B Void for lack of consideration C Valid only if in writing D Voidable at buyer's option

Why: An agreement to pay more without fresh consideration is not enforceable under the Indian Contract Act.

Question 32

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Which of the following best illustrates the principle of consideration in a contract of sale?

A Seller transfers goods, buyer promises to pay price B Seller gives goods as a gift C Buyer promises to buy goods in future without price D Seller agrees to sell goods without buyer's acceptance

Why: Consideration involves a promise to pay price by the buyer in exchange for goods from the seller.

Question 33

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Which of the following statements about the contract of sale is correct?

A An agreement to sell is a present sale B A contract of sale requires transfer of ownership immediately C A contract of sale may be absolute or conditional D Consideration is optional in a contract of sale

Why: A contract of sale may be absolute or conditional depending on whether the transfer of ownership is immediate or subject to conditions.

Question 34

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A buyer offers to purchase goods at a specified price. The seller replies with a different price. This is:

A Acceptance of the original offer B A counter-offer C A rejection with no new offer D An invitation to treat

Why: Changing the terms of the offer constitutes a counter-offer which rejects the original offer.

Question 35

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Which of the following is true regarding acceptance in the formation of a contract of sale?

A Acceptance must always be in writing B Acceptance must be absolute and unqualified C Acceptance can be implied by silence D Acceptance can be made after the offer has lapsed

Why: Acceptance must be absolute and unqualified to create a binding contract.

Question 36

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A contract of sale is formed when:

A The offer is made B The offer is accepted C The goods are delivered D The price is paid

Why: A contract is formed when the offer is accepted by the offeree.

Question 37

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Match the following sections of the Sale of Goods Act, 1930 with their descriptions:

A A. Section 2(1) - Definition of contract of sale
B. Section 4 - Capacity to buy and sell
C. Section 6 - Goods perishing before sale
D. Section 7 - Goods perishing after sale but before delivery B A. Section 4 - Definition of contract of sale
B. Section 2(1) - Capacity to buy and sell
C. Section 7 - Goods perishing before sale
D. Section 6 - Goods perishing after sale but before delivery C A. Section 6 - Definition of contract of sale
B. Section 7 - Capacity to buy and sell
C. Section 2(1) - Goods perishing before sale
D. Section 4 - Goods perishing after sale but before delivery D A. Section 7 - Definition of contract of sale
B. Section 6 - Capacity to buy and sell
C. Section 4 - Goods perishing before sale
D. Section 2(1) - Goods perishing after sale but before delivery

Why: Section 2(1) defines contract of sale, Section 4 deals with capacity, Section 6 covers goods perishing before sale, and Section 7 covers goods perishing after sale but before delivery.

Question 38

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Assertion (A): An offer can be revoked at any time before acceptance.
Reason (R): Acceptance must be communicated to the offeror to be valid.
Choose the correct option:

A Both A and R are true and R is the correct explanation of A B Both A and R are true but R is not the correct explanation of A C A is true but R is false D A is false but R is true

Why: An offer can be revoked any time before acceptance, and acceptance must be communicated to the offeror to be valid, making the reason a correct explanation of the assertion.

Question 39

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A buyer orders goods by telephone and the seller dispatches the goods immediately. The buyer receives the goods but refuses to pay. Which of the following is true?

A No contract was formed as there was no written acceptance B Contract was formed upon dispatch of goods by seller C Contract was formed when buyer ordered goods by telephone D Contract was formed only when buyer accepted goods

Why: A contract is formed when the buyer makes an offer by ordering goods and the seller accepts by dispatching the goods, implying acceptance.

Question 40

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A seller agrees to sell goods to a buyer for \( \text{₹} 50,000 \). The buyer promises to pay \( \text{₹} 60,000 \) instead. The seller accepts. Is the agreement to pay the higher price enforceable?

A Yes, because the buyer promised more money B No, because there is no fresh consideration for the higher amount C Yes, if the promise is in writing D No, unless the goods are different

Why: An agreement to pay more without fresh consideration is not enforceable under the Indian Contract Act.

Question 41

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Which of the following best defines a 'condition' in the Law of Sale of Goods?

A A term that is subsidiary to the main purpose of the contract B A fundamental term that goes to the root of the contract C A term that cannot be breached without consequences D A term that only affects the price of goods

Why: A condition is a fundamental term of the contract, breach of which allows the aggrieved party to repudiate the contract.

Question 42

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Under the Sale of Goods Act, which of the following is an example of a warranty?

A The seller guarantees the goods are free from encumbrances B The seller promises to deliver the goods on a specific date C The seller assures that the goods are of merchantable quality D The seller guarantees the goods will be fit for a particular purpose

Why: A warranty is a subsidiary term, such as the guarantee that goods are free from encumbrances, breach of which entitles the buyer to damages but not repudiation.

Question 43

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Which section of the Sale of Goods Act, 1930 defines 'conditions' and 'warranties'?

A Section 11 B Section 12 C Section 13 D Section 14

Why: Section 12 of the Sale of Goods Act, 1930 defines conditions and warranties in a contract of sale of goods.

Question 44

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Which of the following best distinguishes a 'condition' from a 'warranty'?

A A condition is a minor term; a warranty is a major term B Breach of a condition allows contract repudiation; breach of a warranty only allows damages C A warranty is always implied; a condition is always expressed D Breach of warranty allows contract termination; breach of condition does not

Why: The key distinction is that breach of a condition allows the aggrieved party to repudiate the contract, whereas breach of a warranty only entitles them to damages.

Question 45

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Which of the following is a correct statement regarding contract terms in a sale of goods contract?

A All terms in a contract are conditions B Terms can be conditions, warranties, or innominate terms C Warranties are always more important than conditions D Breach of any term allows contract termination

Why: Contract terms can be conditions, warranties, or innominate terms, each with different legal consequences upon breach.

Question 46

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If a buyer breaches a condition of the contract, what is the seller entitled to do?

A Only claim damages B Repudiate the contract and claim damages C Ignore the breach and continue the contract D Only terminate the contract without damages

Why: Breach of a condition allows the innocent party to repudiate the contract and also claim damages.

Question 47

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Which section of the Sale of Goods Act implies a condition that goods must be of merchantable quality?

A Section 14(2) B Section 12(1) C Section 15 D Section 16

Why: Section 14(2) of the Sale of Goods Act implies a condition that goods sold in the course of business must be of merchantable quality.

Question 48

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Which of the following best describes the legal consequence of breaching a warranty in a sale of goods contract?

A The contract is automatically terminated B The aggrieved party can repudiate the contract C The aggrieved party can claim damages only D The contract becomes void ab initio

Why: Breach of warranty entitles the aggrieved party to claim damages but does not allow repudiation of the contract.

Question 49

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In which case did the court hold that a stipulation as to time of delivery is a condition?

A Poussard v Spiers and Pond B Bettini v Gye C Carlill v Carbolic Smoke Ball Co. D Hadley v Baxendale

Why: In Poussard v Spiers and Pond, the court held that a stipulation as to time of delivery was a condition, breach of which allowed contract repudiation.

Question 50

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Which of the following remedies is NOT available for breach of a condition under the Sale of Goods Act?

A Repudiation of contract B Claim for damages C Specific performance D Claim for restitution

Why: Claim for restitution is generally not a remedy for breach of condition; repudiation, damages, and specific performance are recognized remedies.

Question 51

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A buyer orders 100 branded watches but receives 90 branded and 10 unbranded watches. This is a breach of which contract term?

A Warranty B Condition C Innominate term D Representation

Why: The term specifying the exact quantity and brand is a condition; breach allows repudiation or damages.

Question 52

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Which section of the Sale of Goods Act deals with the implied condition as to fitness for a particular purpose?

A Section 14(3) B Section 12(2) C Section 15 D Section 16

Why: Section 14(3) implies a condition that goods shall be reasonably fit for a particular purpose made known to the seller.

Question 53

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Which of the following statements about breach of warranty is correct?

A Breach of warranty allows the buyer to reject the goods B Breach of warranty allows the buyer to terminate the contract C Breach of warranty entitles the buyer to damages only D Breach of warranty has no legal consequence

Why: Breach of warranty entitles the buyer to claim damages but not to reject goods or terminate the contract.

Question 54

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Which of the following best explains an 'innominate term' in contract law related to sale of goods?

A A term that is neither a condition nor a warranty and whose breach consequences depend on the effect B A term that is always a condition C A term that is always a warranty D A term that has no legal effect

Why: An innominate term is one where the consequences of breach depend on the seriousness of the breach and its effect on the contract.

Question 55

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In the context of sale of goods, which of the following is true about the 'condition precedent'?

A It is a condition that must be fulfilled before a contract becomes binding B It is a warranty that is implied in every contract C It is a term that can be waived by either party at any time D It is a term that relates to the price of goods

Why: A condition precedent is a condition that must be satisfied before the contract or an obligation under it becomes effective.

Question 56

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Which case established that breach of warranty does not entitle the buyer to reject goods but only to claim damages?

A Bettini v Gye B Poussard v Spiers and Pond C Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. D Carlill v Carbolic Smoke Ball Co.

Why: In Bettini v Gye, the court held that breach of warranty does not entitle repudiation but only damages.

Question 57

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A contract states that delivery must be made on 1st July. Delivery on 5th July occurs. The court treats this term as a condition. What is the buyer's right?

A Accept goods and claim damages only B Reject goods and repudiate the contract C Ignore delay and continue contract D Terminate contract without damages

Why: If time is of the essence and the term is a condition, breach allows repudiation and rejection of goods.

Question 58

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Which of the following remedies is available for breach of warranty but NOT for breach of condition?

A Repudiation of contract B Claim for damages C Specific performance D Termination of contract

Why: Claim for damages is available for breach of both, but repudiation and termination are not available for breach of warranty.

Question 59

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Which section of the Sale of Goods Act implies a warranty that the buyer shall have and enjoy quiet possession of the goods?

A Section 12(1) B Section 14(2) C Section 15 D Section 16

Why: Section 12(1) implies a warranty that the buyer shall have and enjoy quiet possession of the goods.

Question 60

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Match the following Sections of the Sale of Goods Act with their correct provisions:

A A. Section 12 - Warranty of quiet possession
B. Section 14(2) - Condition as to merchantable quality
C. Section 14(3) - Condition as to fitness for purpose
D. Section 15 - Sale by description B A. Section 14(2) - Warranty of quiet possession
B. Section 12 - Condition as to merchantable quality
C. Section 15 - Condition as to fitness for purpose
D. Section 14(3) - Sale by description C A. Section 15 - Warranty of quiet possession
B. Section 14(3) - Condition as to merchantable quality
C. Section 12 - Condition as to fitness for purpose
D. Section 14(2) - Sale by description D A. Section 14(3) - Warranty of quiet possession
B. Section 15 - Condition as to merchantable quality
C. Section 14(2) - Condition as to fitness for purpose
D. Section 12 - Sale by description

Why: Section 12 implies warranty of quiet possession; Section 14(2) implies condition as to merchantable quality; Section 14(3) implies condition as to fitness for purpose; Section 15 relates to sale by description.

Question 61

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Assertion (A): Breach of a condition always entitles the innocent party to repudiate the contract.
Reason (R): Innominate terms are treated as conditions in all cases of breach.

A Both A and R are true and R is the correct explanation of A B Both A and R are true but R is not the correct explanation of A C A is true but R is false D A is false but R is true

Why: While breach of a condition generally entitles repudiation, innominate terms are not always treated as conditions; their treatment depends on the breach's effect.

Question 62

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A seller delivers goods that do not conform to the description but are of merchantable quality. The buyer refuses to accept them. Which statement is correct?

A The buyer can reject the goods because description is a condition B The buyer cannot reject but can claim damages C The buyer must accept the goods as they are merchantable D The buyer can repudiate the contract

Why: Sale by description is a condition; breach allows the buyer to reject the goods.

Question 63

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Which of the following best describes the remedy available when there is a breach of condition as to fitness for purpose under the Sale of Goods Act?

A The buyer can only claim damages B The buyer can reject the goods and repudiate the contract C The buyer must accept the goods and pay full price D The buyer can only claim specific performance

Why: Breach of a condition as to fitness for purpose entitles the buyer to reject the goods and repudiate the contract.

Question 64

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Which judicial principle was established in the case of Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. regarding contract terms?

A All terms are conditions B The distinction between conditions and warranties is absolute C The concept of innominate terms was introduced D Breach of warranty allows repudiation

Why: The case introduced the concept of innominate terms, where the remedy depends on the effect of the breach.

Question 65

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Which of the following best defines the term 'property transfer' in the context of the Sale of Goods Act?

A The passing of ownership from the seller to the buyer B The passing of risk from the seller to the buyer C The formation of a sale agreement D The delivery of goods to the buyer

Why: Property transfer refers to the passing of ownership or title in the goods from the seller to the buyer under the Sale of Goods Act.

Question 66

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Under the Sale of Goods Act, when does the risk in goods generally pass from the seller to the buyer?

A When the property in the goods passes to the buyer B When the goods are delivered to the carrier C When the sale agreement is signed D When the buyer inspects the goods

Why: As a general rule, risk passes with property. That is, the risk passes to the buyer when ownership in the goods passes to him.

Question 67

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Which of the following best describes 'ownership' in the context of sale of goods?

A The right to possess and use the goods exclusively B The right to inspect goods before purchase C The right to receive goods from the seller D The right to return goods after purchase

Why: Ownership means the legal right to possess, use, and dispose of the goods exclusively.

Question 68

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Which of the following is an essential element of a valid sale agreement under the Sale of Goods Act?

A Transfer of property in goods for a price B Delivery of goods without payment C Exchange of goods without price D Agreement to sell without transfer of property

Why: A sale agreement must include the transfer of property in goods from the seller to the buyer for a price.

Question 69

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According to the Sale of Goods Act, which rule applies when goods are specific and in a deliverable state at the time of the contract?

A Property passes to the buyer when the contract is made B Property passes when the goods are delivered C Property passes when payment is made D Property passes when goods are ascertained

Why: For specific goods in a deliverable state, property passes to the buyer at the time the contract is made, unless otherwise agreed.

Question 70

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Which of the following statements correctly explains the passing of risk in a sale involving unascertained goods?

A Risk passes only when goods are ascertained and appropriated to the contract B Risk passes immediately upon contract formation C Risk passes when the buyer inspects the goods D Risk never passes before delivery

Why: In the case of unascertained goods, risk passes only when the goods are ascertained and appropriated to the contract.

Question 71

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Which of the following best describes the effect of a condition on the passing of risk in a sale of goods contract?

A Risk does not pass until the condition is fulfilled B Risk passes immediately upon contract formation C Risk passes when the buyer receives the goods D Risk passes regardless of conditions

Why: If the sale is subject to a condition, risk does not pass until that condition is fulfilled.

Question 72

Question bank

In a contract for the sale of specific goods, if the seller wrongfully neglects or refuses to deliver the goods, when does the risk pass to the buyer?

A Risk passes to the buyer despite non-delivery B Risk remains with the seller until delivery C Risk passes only after payment D Risk passes when the buyer inspects the goods

Why: If the seller wrongfully neglects or refuses to deliver, risk passes to the buyer as if the goods had been delivered.

Question 73

Question bank

Which of the following best describes the intention of parties in the transfer of property in goods under a sale agreement?

A Property passes when parties intend it to pass B Property passes only when goods are delivered C Property passes only on payment D Property passes automatically on contract formation

Why: The transfer of property depends on the intention of the parties as expressed or implied in the contract.

Question 74

Question bank

Which of the following statements correctly distinguishes legal ownership from equitable ownership in the sale of goods context?

A Legal ownership confers full title; equitable ownership confers beneficial interest B Equitable ownership confers full title; legal ownership confers beneficial interest C Both confer identical rights and interests D Neither confers any rights until delivery

Why: Legal ownership is the formal title recognized by law, whereas equitable ownership refers to the beneficial interest in the goods.

Question 75

Question bank

Under the Sale of Goods Act, when does the property in unascertained goods pass to the buyer?

A When the goods are ascertained and appropriated to the contract B Immediately upon contract formation C When the buyer pays the price D When the goods are delivered

Why: Property in unascertained goods passes only when the goods are identified and appropriated to the contract.

Question 76

Question bank

Which of the following rules applies when goods are delivered to a carrier for transmission to the buyer without any reservation of right of disposal by the seller?

A Risk passes to the buyer when goods are delivered to the carrier B Risk remains with the seller until goods reach the buyer C Risk passes only after payment D Risk passes when the buyer inspects the goods

Why: If goods are delivered to a carrier without reservation of right of disposal, risk passes to the buyer at that point.

Question 77

Question bank

In a sale where the price is payable on delivery, when does the property in goods pass to the buyer according to the Sale of Goods Act?

A When the goods are delivered to the buyer B When the contract is made C When the price is paid D When the goods are ascertained

Why: When price is payable on delivery, property passes when the goods are delivered to the buyer.

Question 78

Question bank

Which of the following best illustrates the effect of a warranty on the passing of risk in a sale of goods contract?

A Risk passes to the buyer even if the warranty is breached B Risk remains with the seller until warranty is fulfilled C Risk passes only after warranty is fulfilled D Risk does not pass if warranty is breached

Why: Unlike conditions, breach of warranty does not affect the passing of risk; risk passes with property.

Question 79

Question bank

In a contract for the sale of specific goods, if the seller delivers the goods to the buyer but the goods are damaged during transit by a third party, who bears the risk?

A Risk lies with the buyer once property passes B Risk lies with the seller until delivery C Risk lies with the carrier D Risk lies with the third party

Why: Once property passes to the buyer, the risk also passes to the buyer even if damage occurs during transit.

Question 80

Question bank

A contract states that property in goods shall pass to the buyer only when payment is made in full. Which rule of property transfer does this illustrate?

A Intention of parties governs transfer of property B Property passes immediately on contract formation C Property passes when goods are delivered D Property passes when goods are ascertained

Why: The parties’ intention to transfer property only on full payment controls the timing of property transfer.

Question 81

Question bank

Which of the following scenarios best illustrates equitable ownership in the sale of goods context?

A A buyer has paid the price but legal title is retained by the seller as security B A buyer has legal title but has not paid the price C A seller has delivered goods and transferred legal title D A third party holds goods on behalf of the buyer

Why: Equitable ownership arises when the buyer has a beneficial interest (e.g., has paid price) but legal title is retained by the seller as security.

Question 82

Question bank

In a contract for the sale of unascertained goods, the seller appropriates goods to the contract by marking and setting them aside. When does the risk pass to the buyer?

A When goods are appropriated to the contract B When contract is formed C When goods are delivered D When price is paid

Why: Risk passes when unascertained goods are appropriated to the contract by the seller or buyer.

Question 83

Question bank

A buyer agrees to purchase goods and pay the price in installments. The contract states that property shall pass only after full payment. Which of the following is true regarding risk?

A Risk passes with property after full payment B Risk passes immediately on contract formation C Risk passes on delivery regardless of payment D Risk never passes to buyer

Why: Where property passes only after full payment, risk also passes only after property passes, i.e., after full payment.

Question 84

Question bank

Which of the following best explains the rule for transfer of property when goods are delivered to a carrier for transmission to the buyer with a reservation of right of disposal by the seller?

A Property does not pass until the buyer receives the goods B Property passes when goods are delivered to the carrier C Property passes on contract formation D Property passes when payment is made

Why: If the seller reserves the right of disposal, property does not pass until the buyer receives the goods.

Question 85

Question bank

Match the following terms with their correct descriptions:

A A. Property transfer - 1. Passing of ownership
B. Passing of risk - 2. Passing of liability for loss
C. Specific goods - 3. Goods identified and agreed upon
D. Unascertained goods - 4. Goods not identified at time of contract B A. Property transfer - 2. Passing of liability for loss
B. Passing of risk - 1. Passing of ownership
C. Specific goods - 4. Goods not identified at time of contract
D. Unascertained goods - 3. Goods identified and agreed upon C A. Property transfer - 3. Goods identified and agreed upon
B. Passing of risk - 4. Goods not identified at time of contract
C. Specific goods - 1. Passing of ownership
D. Unascertained goods - 2. Passing of liability for loss D A. Property transfer - 4. Goods not identified at time of contract
B. Passing of risk - 3. Goods identified and agreed upon
C. Specific goods - 2. Passing of liability for loss
D. Unascertained goods - 1. Passing of ownership

Why: Property transfer means passing of ownership; passing of risk means passing of liability for loss; specific goods are goods identified and agreed upon; unascertained goods are goods not identified at the time of contract.

Question 86

Question bank

Assertion (A): Risk in goods passes to the buyer only when the goods are delivered.
Reason (R): Property and risk always pass simultaneously under the Sale of Goods Act.
Choose the correct option:

A Both A and R are true and R is the correct explanation of A B Both A and R are true but R is not the correct explanation of A C A is false but R is true D Both A and R are false

Why: Risk generally passes with property, which may pass before delivery. Therefore, risk does not always pass only on delivery, making A false and R true.

Question 87

Question bank

In a sale agreement, the parties agree that property shall pass only when the buyer inspects the goods and approves them. Which principle governs this transfer?

A Intention of the parties B Rule of specific goods C Rule of unascertained goods D Rule of delivery

Why: The transfer of property depends on the intention of the parties, which can include conditions like inspection and approval.

Question 88

Question bank

A buyer purchases goods which are yet to be manufactured. The contract states that property will pass when the goods are completed and appropriated to the contract. When does the risk pass to the buyer?

A When the goods are completed and appropriated to the contract B Immediately on contract formation C When the buyer pays the price D When the goods are delivered

Why: Risk passes when the goods are ascertained and appropriated to the contract, i.e., when completed and identified.

Question 89

Question bank

Which section of the Sale of Goods Act, 1930 primarily deals with the performance of the contract of sale?

A Section 31 B Section 37 C Section 39 D Section 41

Why: Section 37 of the Sale of Goods Act, 1930 deals with the performance of the contract of sale, including delivery and payment obligations.

Question 90

Question bank

In a contract of sale, the term 'performance' primarily refers to:

A Only the delivery of goods B Only the payment of price C Both delivery of goods and payment of price D Acceptance of goods by the buyer

Why: Performance of contract of sale involves both the delivery of goods by the seller and payment of the price by the buyer.

Question 91

Question bank

Which of the following best describes the legal obligation of the seller regarding delivery under the Sale of Goods Act?

A Seller must deliver goods only if the buyer demands it in writing B Seller must deliver goods at the time and place agreed upon in the contract C Seller can delay delivery without any consequences D Seller is not bound to deliver goods if payment is not made in advance

Why: The seller is legally bound to deliver the goods at the time and place agreed upon in the contract, as per the Sale of Goods Act.

Question 92

Question bank

Under the Sale of Goods Act, when is the payment of price generally due in a contract of sale?

A Before the contract is formed B At the time and place the goods are delivered C After the buyer has used the goods for 30 days D Only after the buyer accepts the goods

Why: Payment of price is generally due at the time and place the goods are delivered, unless otherwise agreed by the parties.

Question 93

Question bank

Which of the following statements about acceptance of goods is correct?

A Acceptance must be express and in writing B Acceptance can be implied by the buyer's conduct C Acceptance is not necessary if the goods are defective D Acceptance always occurs at the time of delivery

Why: Acceptance of goods can be implied by the buyer's conduct, such as using or retaining the goods without objection.

Question 94

Question bank

Which of the following is NOT a mode of delivery under the Sale of Goods Act?

A Actual delivery B Constructive delivery C Symbolic delivery D Conditional delivery

Why: Conditional delivery is not recognized as a mode of delivery; the recognized modes are actual, constructive, and symbolic delivery.

Question 95

Question bank

If the seller wrongfully neglects or refuses to deliver the goods, the buyer may:

A Cancel the contract and claim damages B Wait indefinitely for delivery C Accept partial delivery only D Pay the price without receiving goods

Why: The buyer has the right to cancel the contract and claim damages if the seller wrongfully neglects or refuses to deliver the goods.

Question 96

Question bank

Which of the following best illustrates 'constructive delivery' of goods?

A Physically handing over goods to the buyer B Delivering the key to a warehouse where goods are stored C Sending an invoice to the buyer D Buyer inspecting the goods at the seller's premises

Why: Constructive delivery occurs when the seller delivers something that gives the buyer control over the goods, such as keys to a warehouse.

Question 97

Question bank

A buyer who accepts goods but later discovers defects may:

A Reject the goods immediately without notice B Claim damages for breach of warranty C Return the goods without any liability D Cancel the contract without any remedy

Why: If the buyer accepts goods and later finds defects, they may claim damages for breach of warranty but cannot reject the goods outright.

Question 98

Question bank

Which section of the Sale of Goods Act states that unless otherwise agreed, the buyer must pay the price at the time and place the goods are delivered?

A Section 37 B Section 38 C Section 39 D Section 40

Why: Section 39 of the Sale of Goods Act provides that the buyer must pay the price at the time and place the goods are delivered unless otherwise agreed.

Question 99

Question bank

In which situation is the buyer deemed to have accepted the goods under the Sale of Goods Act?

A When the buyer inspects the goods and raises objections immediately B When the buyer uses the goods without objection C When the buyer refuses to take delivery D When the buyer returns the goods within the agreed period

Why: The buyer is deemed to have accepted the goods when they use or retain the goods without raising objections.

Question 100

Question bank

A contract of sale requires the seller to deliver goods and the buyer to pay the price. If the contract does not specify the place of delivery, where is the delivery presumed to take place?

A At the seller's place of business B At the buyer's place of business C At a neutral third party's location D At the place where the contract was signed

Why: If the contract does not specify the place of delivery, delivery is presumed to take place at the seller's place of business.

Question 101

Question bank

Which of the following best describes the effect of non-payment of price by the buyer when the goods have been delivered?

A The seller can sue for price and retain the goods until payment B The seller must return the goods immediately C The buyer can keep the goods without paying D The contract is automatically cancelled

Why: If the buyer does not pay the price after delivery, the seller can sue for the price and retain possession of the goods until payment is made.

Question 102

Question bank

Which of the following statements about the time of payment in a contract of sale is TRUE?

A Payment must always be made in cash B Payment is due only after the buyer inspects the goods C Payment is due at the time and place of delivery unless otherwise agreed D Payment can be deferred indefinitely

Why: Payment is generally due at the time and place of delivery unless the parties agree otherwise.

Question 103

Question bank

A seller delivers goods to a carrier for transmission to the buyer. The buyer refuses to accept the goods upon arrival. What is the seller's right in this situation?

A Seller can sue for price and damages B Seller must take back the goods without compensation C Seller loses all rights to the goods D Seller must deliver goods to another buyer

Why: If the buyer refuses to accept goods, the seller can sue for the price and damages for breach of contract.

Question 104

Question bank

Which of the following best describes the legal consequence if the buyer wrongfully neglects or refuses to accept and pay for the goods?

A Seller can sue for damages and resell the goods B Seller must keep the goods indefinitely C Seller loses the right to claim price D Seller must deliver goods to another buyer without notice

Why: If the buyer wrongfully refuses to accept and pay for goods, the seller may sue for damages and resell the goods after giving notice.

Question 105

Question bank

Which of the following is an example of symbolic delivery in the context of sale of goods?

A Handing over the goods physically B Delivering the key to a warehouse where goods are stored C Delivering a document of title to the goods D Sending a sample of the goods

Why: Symbolic delivery involves delivering something that represents the goods, such as a document of title.

Question 106

Question bank

Match the following terms with their correct descriptions:

A A. Actual delivery - 1. Delivery by handing over possession
B. Constructive delivery - 2. Delivery by handing over control without possession
C. Symbolic delivery - 3. Delivery by handing over a document
D. Acceptance - 4. Buyer’s approval by conduct or express statement B A. Actual delivery - 2. Delivery by handing over control without possession
B. Constructive delivery - 3. Delivery by handing over a document
C. Symbolic delivery - 1. Delivery by handing over possession
D. Acceptance - 4. Buyer’s approval by conduct or express statement C A. Actual delivery - 3. Delivery by handing over a document
B. Constructive delivery - 1. Delivery by handing over possession
C. Symbolic delivery - 2. Delivery by handing over control without possession
D. Acceptance - 4. Buyer’s approval by conduct or express statement D A. Actual delivery - 4. Buyer’s approval by conduct or express statement
B. Constructive delivery - 2. Delivery by handing over control without possession
C. Symbolic delivery - 3. Delivery by handing over a document
D. Acceptance - 1. Delivery by handing over possession

Why: Actual delivery means handing over possession; constructive delivery means handing over control without possession; symbolic delivery means handing over a document representing the goods; acceptance means buyer’s approval by conduct or express statement.

Question 107

Question bank

Assertion (A): The buyer is not bound to pay the price if the goods are not delivered at the agreed time and place.
Reason (R): Time and place of delivery are conditions of the contract of sale.

A Both A and R are true and R is the correct explanation of A B Both A and R are true but R is not the correct explanation of A C A is true but R is false D A is false but R is true

Why: Time and place of delivery are conditions of the contract; failure to deliver accordingly entitles the buyer to withhold payment.

Question 108

Question bank

Which of the following statements is CORRECT regarding the acceptance of goods by the buyer?

A Acceptance must be communicated in writing to the seller B Acceptance can be inferred from the buyer’s conduct C Acceptance is irrelevant in a contract of sale D Acceptance occurs only when the buyer pays the price

Why: Acceptance can be implied by the buyer’s conduct, such as using or retaining the goods without objection.

Question 109

Question bank

If the goods are delivered to the buyer but are damaged before acceptance, who bears the risk according to the Sale of Goods Act?

A Seller bears the risk until acceptance B Buyer bears the risk immediately upon delivery C Risk is shared equally between buyer and seller D Risk passes to the buyer only after payment

Why: The risk remains with the seller until the buyer accepts the goods, unless otherwise agreed.

Question 110

Question bank

Which of the following is TRUE about payment of price when the contract is silent about the time of payment?

A Payment is due before delivery B Payment is due at the time and place of delivery C Payment is due after inspection of goods D Payment can be deferred indefinitely

Why: When the contract does not specify, payment is due at the time and place of delivery as per the Sale of Goods Act.

Question 111

Question bank

A buyer orders 100 units of goods to be delivered by a specific date. The seller delivers only 80 units on that date. What is the buyer’s right?

A Accept the 80 units and reject the rest B Reject the entire delivery and cancel the contract C Accept all goods regardless of quantity D Pay only for the 80 units delivered

Why: Delivery of less than the contracted quantity is a breach of condition, entitling the buyer to reject the entire delivery and cancel the contract.

Question 112

Question bank

Which of the following statements is TRUE regarding the seller’s right to withhold delivery of goods?

A Seller can withhold delivery if the buyer has not paid the price B Seller must deliver goods regardless of payment status C Seller can only withhold delivery if goods are defective D Seller cannot withhold delivery under any circumstances

Why: The seller has the right to withhold delivery if the buyer has not paid the price or is not ready to pay.

Question 113

Question bank

Who is considered an unpaid seller under the Sale of Goods Act?

A A person who has sold goods and received full payment B A person who has sold goods but has not received the whole or any part of the price C A person who has bought goods but not paid the price D A person who has delivered goods after receiving full payment

Why: An unpaid seller is defined as a person who has sold goods but has not received the whole or any part of the price due to him under the contract of sale.

Question 114

Question bank

Which of the following best describes the status of an unpaid seller?

A He is a creditor of the buyer for the price of goods B He loses all rights once goods are delivered C He becomes the owner of the goods until payment is made D He has no legal rights against the buyer

Why: The unpaid seller is essentially a creditor of the buyer for the price of the goods and has certain rights to protect his interest until payment is made.

Question 115

Question bank

Under what condition does the unpaid seller acquire a lien on the goods sold?

A When the goods have been delivered and ownership has passed B When the goods are in possession of the seller and payment is due C When the buyer has paid part of the price D When the goods are lost in transit

Why: The unpaid seller has a right of lien on the goods in his possession when the payment is due but has not been made by the buyer.

Question 116

Question bank

Which of the following is NOT a condition for the right of lien to exist?

A The seller must be in possession of the goods B The price must be due from the buyer C The goods must have been delivered to the buyer D The goods must be of a specific or ascertained kind

Why: The right of lien exists only when the seller is in possession of the goods; once goods are delivered to the buyer, the lien is lost.

Question 117

Question bank

An unpaid seller can exercise the right of lien on goods when:

A The buyer becomes insolvent B The buyer refuses to accept the goods C The price of the goods is not yet due D The goods are in transit to the buyer

Why: The unpaid seller can exercise lien if the buyer refuses to accept the goods or the price is due and unpaid, provided the seller has possession of the goods.

Question 118

Question bank

Which section of the Sale of Goods Act deals with the right of lien of the unpaid seller?

A Section 47 B Section 50 C Section 55 D Section 60

Why: Section 47 of the Sale of Goods Act, 1930, specifically deals with the unpaid seller's right of lien on the goods.

Question 119

Question bank

What does the right of stoppage in transit allow an unpaid seller to do?

A Stop the goods from being delivered to the buyer while in transit if the buyer is insolvent B Stop the buyer from reselling the goods after delivery C Stop the payment of price by the buyer D Stop the manufacture of goods by the seller

Why: The right of stoppage in transit allows the unpaid seller to stop the goods from reaching the buyer when the buyer becomes insolvent while the goods are in transit.

Question 120

Question bank

Which of the following is a necessary condition for the exercise of the right of stoppage in transit?

A The goods must have reached the buyer B The buyer must have become insolvent C The seller must have received full payment D The goods must be unascertained

Why: The unpaid seller can exercise the right of stoppage in transit only if the buyer has become insolvent and the goods are still in transit.

Question 121

Question bank

If the goods have been delivered to the carrier but not yet reached the buyer, the unpaid seller can exercise the right of stoppage in transit. This right is lost if:

A The goods are sold to a third party B The buyer becomes insolvent after delivery C The goods have been delivered to the buyer or his agent D The price is not yet due

Why: The right of stoppage in transit ceases once the goods are delivered to the buyer or his authorized agent.

Question 122

Question bank

An unpaid seller stopped goods in transit due to buyer's insolvency. The goods were subsequently lost in transit. Who bears the loss?

A The buyer B The seller C The carrier D The insurance company

Why: Once the unpaid seller exercises the right of stoppage in transit, the goods are considered in his possession, so the loss is borne by the seller.

Question 123

Question bank

Which section of the Sale of Goods Act deals with the right of stoppage in transit?

A Section 50 B Section 47 C Section 55 D Section 60

Why: Section 50 of the Sale of Goods Act, 1930, provides the unpaid seller the right of stoppage in transit.

Question 124

Question bank

What is the right of resale available to an unpaid seller?

A The right to resell goods if the buyer defaults in payment after reasonable notice B The right to resell goods before delivery to the buyer C The right to resell goods only after the buyer's insolvency D The right to resell goods without any notice

Why: The unpaid seller has the right to resell the goods if the buyer fails to pay the price after a reasonable notice has been given.

Question 125

Question bank

Which of the following conditions must be fulfilled before an unpaid seller can exercise the right of resale?

A The buyer must have accepted the goods B The price must have become due and unpaid for a reasonable time after notice C The goods must be unascertained D The goods must be delivered to the buyer

Why: The right of resale can be exercised only if the price has become due and remains unpaid after a reasonable notice to the buyer.

Question 126

Question bank

An unpaid seller resells the goods without giving a reasonable notice to the buyer. What is the legal consequence?

A The resale is valid and binding on the buyer B The resale is invalid and the seller is liable for damages C The buyer loses all rights to claim the goods D The buyer must pay double the price

Why: Resale without reasonable notice is wrongful and the seller may be liable to the buyer for damages.

Question 127

Question bank

Which section of the Sale of Goods Act governs the right of resale by the unpaid seller?

A Section 55 B Section 47 C Section 50 D Section 60

Why: Section 55 of the Sale of Goods Act, 1930, deals with the unpaid seller's right of resale.

Question 128

Question bank

Which of the following is a limitation on the right of lien of an unpaid seller?

A Lien can be exercised even after delivery of goods to the buyer B Lien is lost if the buyer becomes insolvent C Lien is lost if the goods are delivered to a carrier for transmission to the buyer D Lien can be exercised on unascertained goods

Why: The right of lien is lost when the goods are delivered to a carrier or other bailee for transmission to the buyer.

Question 129

Question bank

Which of the following statements about the right of stoppage in transit is correct?

A It can be exercised even if the buyer is solvent B It can be exercised only when the goods are in the possession of the buyer C It is lost once the goods reach the buyer or his agent D It applies only to unascertained goods

Why: The right of stoppage in transit is lost once the goods reach the buyer or his authorized agent.

Question 130

Question bank

The unpaid seller's rights of lien, stoppage in transit, and resale are subject to:

A No limitations once the contract is made B Certain conditions and limitations prescribed by law C The buyer's consent only D The seller's discretion without any legal constraints

Why: The rights of the unpaid seller are subject to specific conditions and limitations as prescribed under the Sale of Goods Act.

Question 131

Question bank

Which of the following distinguishes an unpaid seller from an insolvent buyer?

A An unpaid seller has sold goods and not received payment, whereas an insolvent buyer cannot pay the price B An unpaid seller owns the goods, while an insolvent buyer owns the goods C An unpaid seller is always a creditor, an insolvent buyer is always a debtor D There is no distinction; both terms mean the same

Why: An unpaid seller is one who has not received payment for goods sold, whereas an insolvent buyer is unable to pay the price due to insolvency.

Question 132

Question bank

Which of the following best explains the difference between an unpaid seller and an insolvent buyer in terms of rights?

A An unpaid seller has rights to retain goods, an insolvent buyer has no rights B An unpaid seller can exercise lien and stoppage in transit, an insolvent buyer cannot C An unpaid seller loses ownership on insolvency, an insolvent buyer gains ownership D Both have equal rights over the goods

Why: The unpaid seller has specific rights such as lien and stoppage in transit to protect his interest, which the insolvent buyer does not possess.

Question 133

Question bank

In a dispute, the unpaid seller claims lien on goods, but the buyer is insolvent and goods are in transit. The seller also wants to resell the goods without notice. Which of the following is correct?

A The seller can exercise lien, stoppage in transit, and resell without notice B The seller can exercise lien and stoppage in transit but must give reasonable notice before resale C The seller cannot exercise any rights once goods are in transit D The seller can resell without notice if the buyer is insolvent

Why: The seller can exercise lien and stoppage in transit, but resale requires reasonable notice to the buyer even if insolvent.

Question 134

Question bank

Match the following rights of the unpaid seller with their corresponding sections under the Sale of Goods Act:

A 1. Right of Lien - Section 50, Right of Stoppage in Transit - Section 55, Right of Resale - Section 47 B 1. Right of Lien - Section 47, Right of Stoppage in Transit - Section 50, Right of Resale - Section 55 C 1. Right of Lien - Section 55, Right of Stoppage in Transit - Section 47, Right of Resale - Section 50 D 1. Right of Lien - Section 60, Right of Stoppage in Transit - Section 55, Right of Resale - Section 47

Why: Section 47 deals with lien, Section 50 with stoppage in transit, and Section 55 with resale rights of the unpaid seller.

Question 135

Question bank

Assertion (A): The unpaid seller can exercise the right of lien even after delivering the goods to the buyer.
Reason (R): The unpaid seller retains ownership of goods until full payment is made.
Choose the correct option:

A Both A and R are true and R is the correct explanation of A B Both A and R are true but R is not the correct explanation of A C A is false but R is true D Both A and R are false

Why: The unpaid seller loses the right of lien once the goods are delivered to the buyer. Also, ownership passes to the buyer as per contract terms, so the assertion is false but the reason is true.

Question 136

Question bank

Which of the following statements about the right of resale is correct?

A The unpaid seller can resell the goods immediately after buyer's default without notice B The unpaid seller must give reasonable notice to the buyer before resale C The right of resale is available only if the goods are unascertained D Resale is not a right but a privilege

Why: The unpaid seller must give reasonable notice to the buyer before exercising the right of resale to avoid liability.

Question 137

Question bank

Which of the following rights can an unpaid seller exercise if the buyer becomes insolvent after goods have been dispatched but before delivery?

A Right of lien only B Right of stoppage in transit only C Right of resale only D Right of lien and resale

Why: If the buyer becomes insolvent while goods are in transit, the unpaid seller can exercise the right of stoppage in transit to regain possession of the goods.

Question 138

Question bank

Which of the following is NOT a right of an unpaid seller under the Sale of Goods Act?

A Right of lien B Right of stoppage in transit C Right to sue for damages for non-acceptance D Right to cancel the contract unilaterally without notice

Why: The unpaid seller does not have an automatic right to cancel the contract unilaterally without notice; other rights are recognized under the Act.

Question 139

Question bank

If the goods are unascertained and the buyer becomes insolvent, can the unpaid seller exercise the right of lien?

A Yes, lien applies to all goods irrespective of ascertainment B No, lien applies only to specific or ascertained goods C Yes, but only if goods are in transit D No, lien applies only after resale

Why: The right of lien applies only to specific or ascertained goods in the possession of the seller.

Question 140

Question bank

Which of the following best defines a 'breach of contract' under the Law of Sale of Goods?

A Failure to perform any promise under the contract without lawful excuse B Mutual agreement to terminate the contract C Performance of all contractual obligations on time D Voluntary rescission of the contract by both parties

Why: A breach of contract occurs when a party fails to perform any promise or obligation under the contract without lawful excuse.

Question 141

Question bank

Under the Sale of Goods Act, which section primarily deals with the seller's right to damages for non-acceptance of goods by the buyer?

A Section 55 B Section 56 C Section 57 D Section 58

Why: Section 55 of the Sale of Goods Act provides the seller the right to claim damages when the buyer wrongfully neglects or refuses to accept and pay for the goods.

Question 142

Question bank

Which of the following remedies involves the court ordering the party in breach to perform their contractual obligations exactly as agreed?

A Damages B Specific performance C Rescission D Quantum meruit

Why: Specific performance is an equitable remedy where the court orders the party in breach to perform the contract as agreed, rather than awarding damages.

Question 143

Question bank

Which of the following statements correctly describes rescission of contract as a remedy?

A It involves the cancellation of the contract and restoration of parties to their original position B It compels the party to perform the contract C It awards monetary compensation for loss suffered D It modifies the terms of the contract

Why: Rescission is the remedy that cancels the contract and aims to restore the parties to the position they were in before the contract was made.

Question 144

Question bank

A seller delivers goods to a buyer, but the buyer refuses to accept them without lawful excuse. What is the seller entitled to claim under the Sale of Goods Act?

A Specific performance B Damages for non-acceptance C Rescission of contract D Quantum meruit

Why: When a buyer wrongfully refuses to accept goods, the seller is entitled to claim damages for non-acceptance under Section 55 of the Sale of Goods Act.

Question 145

Question bank

Which of the following is NOT a condition for claiming specific performance of a contract for sale of goods?

A The goods are unique or of special value B Damages are an adequate remedy C The contract is valid and enforceable D The party seeking specific performance has performed or is ready to perform their part

Why: Specific performance is granted when damages are NOT an adequate remedy. If damages suffice, courts usually do not order specific performance.

Question 146

Question bank

Which of the following best explains the principle of 'mitigation of loss' in the context of damages for breach of contract?

A The injured party must take reasonable steps to reduce the loss caused by breach B The breaching party must pay all losses regardless of mitigation C Damages are awarded without considering the injured party's actions D The injured party can claim damages for speculative losses

Why: The injured party is required to mitigate or minimize the loss resulting from breach; failure to do so may reduce the damages recoverable.

Question 147

Question bank

A contract for sale of a rare painting is breached by the seller. The buyer seeks specific performance. Which of the following is the most likely outcome?

A The court will order specific performance because the painting is unique B The court will refuse specific performance and award damages only C The court will rescind the contract D The court will order the buyer to pay more

Why: Specific performance is typically granted for unique goods such as rare paintings where damages are inadequate to compensate the buyer.

Question 148

Question bank

Which section of the Sale of Goods Act allows the buyer to rescind the contract if the seller delivers goods that do not correspond with the contract description?

A Section 15 B Section 16 C Section 17 D Section 18

Why: Section 15 of the Sale of Goods Act permits the buyer to reject goods and rescind the contract if the goods delivered do not correspond with the contract description.

Question 149

Question bank

A buyer contracts to purchase 100 units of a commodity but receives only 80 units. The buyer refuses to accept the 80 units delivered. What remedy is available to the seller?

A Specific performance for remaining 20 units B Damages for non-acceptance of 80 units C Rescission of contract by the seller D No remedy available

Why: The seller can claim damages for non-acceptance of the 80 units that the buyer refused to accept.

Question 150

Question bank

Which of the following statements about rescission of contract is CORRECT?

A Rescission can be claimed only if the breach is fundamental B Rescission is always available irrespective of breach severity C Rescission results in specific performance D Rescission increases the contractual obligations

Why: Rescission is generally available only when the breach is fundamental or goes to the root of the contract.

Question 151

Question bank

Which of the following best describes the legal effect of a breach of contract in the sale of goods?

A It automatically terminates the contract without any remedy B It entitles the innocent party to remedies including damages, specific performance, or rescission C It requires the parties to renegotiate the contract terms D It results in criminal liability

Why: A breach entitles the innocent party to remedies such as damages, specific performance, or rescission depending on the circumstances.

Question 152

Question bank

A contract for sale of goods specifies delivery on a fixed date. The seller delivers the goods late but the buyer accepts them. What remedy is available to the buyer for the delay?

A Rescission of contract B Damages for breach of warranty of time C Specific performance D No remedy as goods were accepted

Why: If time is not of the essence, late delivery is a breach of warranty, entitling the buyer to damages but not rescission.

Question 153

Question bank

Which of the following is TRUE regarding damages as a remedy for breach of contract under the Sale of Goods Act?

A Damages are always awarded to put the injured party in a better position than if the contract was performed B Damages aim to put the injured party in the position as if the contract was performed C Damages are punitive and meant to punish the breaching party D Damages cannot be claimed if specific performance is available

Why: Damages aim to compensate the injured party to the position they would have been in had the contract been performed, not better.

Question 154

Question bank

A buyer contracts to purchase 50 units of a product. The seller delivers 50 units but 10 units are defective. The buyer refuses to accept any units. What is the buyer's right?

A Accept all units and pay full price B Reject the entire delivery and rescind the contract C Accept only the non-defective units and pay proportionate price D No right to reject as delivery was made

Why: If the goods do not conform to the contract, the buyer may reject the entire delivery and rescind the contract under the Sale of Goods Act.

Question 155

Question bank

Match the following remedies with their corresponding sections under the Sale of Goods Act: 1. Damages for non-acceptance 2. Specific performance 3. Rescission 4. Damages for breach of warranty A. Section 55 B. Section 56 C. Section 15 D. Section 53

A 1-A, 2-B, 3-C, 4-D B 1-B, 2-A, 3-D, 4-C C 1-C, 2-D, 3-A, 4-B D 1-D, 2-C, 3-B, 4-A

Why: Section 55 deals with damages for non-acceptance, Section 56 with specific performance, Section 15 with rescission for non-conforming goods, and Section 53 with damages for breach of warranty.

Question 156

Question bank

Assertion (A): Specific performance is always granted as a remedy in contracts for sale of goods.
Reason (R): Specific performance is an equitable remedy and is granted only when damages are inadequate.
Choose the correct option:

A Both A and R are true, and R is the correct explanation of A B Both A and R are true, but R is not the correct explanation of A C A is true, but R is false D A is false, but R is true

Why: Specific performance is not always granted; it is an equitable remedy granted only when damages are inadequate, making the assertion false and the reason true.

Question 157

Question bank

A seller contracts to sell 100 units of goods to a buyer. The seller delivers 90 units and the buyer refuses to accept them. The seller sues for damages. Which principle applies to the seller's claim?

A The seller must mitigate loss by reselling the goods B The seller can claim full contract price without mitigation C The seller can only claim nominal damages D The seller cannot claim damages if goods are partially delivered

Why: The seller is expected to mitigate loss by reselling the goods; damages are calculated based on the difference between contract price and resale price.

Question 158

Question bank

Which of the following scenarios is LEAST likely to result in a court ordering specific performance in a sale of goods contract?

A Sale of a unique antique car B Sale of rare artwork C Sale of generic bulk commodities like wheat D Sale of custom-made machinery

Why: Courts generally do not order specific performance for generic or fungible goods where damages are an adequate remedy.

Question 159

Question bank

A buyer contracts to purchase goods described as 'new and unused.' The seller delivers goods that are used but in good condition. Which remedy is available to the buyer?

A Specific performance B Damages for breach of warranty C Rescission of contract D No remedy as goods are in good condition

Why: Delivery of goods not conforming to description entitles the buyer to rescind the contract.

Question 160

Question bank

Which of the following best explains the difference between damages and specific performance as remedies for breach of contract?

A Damages compensate financially; specific performance enforces actual performance B Damages enforce contract; specific performance compensates financially C Both are monetary remedies D Both are equitable remedies

Why: Damages provide monetary compensation, whereas specific performance compels the breaching party to perform the contract.

Question 161

Question bank

In which of the following cases is rescission NOT an appropriate remedy for breach of contract in sale of goods?

A When the breach is trivial and does not affect the contract's essence B When the goods delivered are entirely different from the contract description C When the buyer is induced by fraud to enter the contract D When the seller fails to deliver the goods on time and time is of the essence

Why: Rescission is not appropriate for trivial breaches that do not go to the root of the contract.

Question 162

Question bank

What is the correct definition of an auction in the context of sale of goods?

A A private sale between two parties without bidding B A public sale where goods are sold to the highest bidder C A sale where the price is fixed by the seller beforehand D A sale conducted only through written contracts

Why: An auction is a public sale in which goods are sold to the highest bidder through a bidding process.

Question 163

Question bank

Which of the following best describes an auction sale?

A Goods are sold to the lowest bidder B Goods are sold to the highest bidder after acceptance by the auctioneer C Goods are sold only after written acceptance by the buyer D Goods are sold at a fixed price without bidding

Why: In an auction sale, goods are sold to the highest bidder upon acceptance of the bid by the auctioneer.

Question 164

Question bank

Which of the following statements correctly defines the bidding process in an auction sale?

A Bidding is an offer made by the auctioneer to the buyers B Bidding is the process where buyers make successive offers to purchase goods C Bidding is the acceptance of the highest price by the seller D Bidding is the final contract between buyer and seller

Why: Bidding is the process where prospective buyers make successive offers to purchase goods at increasing prices.

Question 165

Question bank

In an auction sale, when does acceptance of a bid occur?

A When the auctioneer announces the sale by the fall of the hammer B When the highest bidder submits a written offer C When the seller signs the bid document D When the buyer pays the bid amount

Why: Acceptance in an auction sale occurs when the auctioneer announces the sale, usually by the fall of the hammer.

Question 166

Question bank

Which legal principle governs the sale by auction under the Sale of Goods Act, 1930?

A The contract is complete when the highest bid is made B The contract is complete when the auctioneer accepts the highest bid C The contract is complete when the buyer pays the price D The contract is complete when the goods are delivered

Why: Under the Sale of Goods Act, 1930, the contract of sale by auction is complete when the auctioneer accepts the highest bid.

Question 167

Question bank

Which type of auction involves the auctioneer setting a minimum price below which the goods will not be sold?

A Absolute auction B Reserve auction C Silent auction D Dutch auction

Why: In a reserve auction, the auctioneer sets a minimum reserve price below which the goods will not be sold.

Question 168

Question bank

What is the primary role of an auctioneer in an auction sale?

A To set the price of goods unilaterally B To accept bids on behalf of the seller and announce the sale C To act as a buyer in the auction D To deliver goods to the highest bidder

Why: The auctioneer acts as an agent of the seller, accepting bids and announcing the sale to the highest bidder.

Question 169

Question bank

Under what condition can a bidder revoke or withdraw their bid in an auction sale?

A At any time before the fall of the hammer B After the auctioneer announces the sale C Only with the consent of the seller D Only if the bid was made in writing

Why: A bidder can revoke or withdraw their bid at any time before the auctioneer announces the sale by the fall of the hammer.

Question 170

Question bank

Which of the following best describes contract formation in an auction sale?

A Contract is formed when the highest bid is made B Contract is formed when the auctioneer accepts the highest bid C Contract is formed when the buyer pays the price D Contract is formed when the goods are delivered

Why: The contract of sale in an auction is formed when the auctioneer accepts the highest bid, typically by the fall of the hammer.

Question 171

Question bank

Which duty is primarily the responsibility of the seller in an auction sale?

A To deliver the goods to the highest bidder after sale B To accept the highest bid unconditionally C To pay the auctioneer's commission D To bid on the goods to increase the price

Why: The seller's primary duty is to deliver the goods to the highest bidder after the sale is completed.

Question 172

Question bank

At what point does the ownership of goods transfer in a sale by auction without reserve?

A When the highest bid is made B When the auctioneer accepts the highest bid C When the buyer pays the price D When the goods are physically delivered

Why: Ownership transfers when the auctioneer accepts the highest bid, which completes the contract of sale.

Question 173

Question bank

Which section of the Sale of Goods Act, 1930 specifically deals with sale by auction?

A Section 4 B Section 64 C Section 62 D Section 10

Why: Section 64 of the Sale of Goods Act, 1930 deals specifically with sale by auction.

Question 174

Question bank

Which of the following is a key distinction between an auction sale and a private sale?

A Auction sale involves bidding; private sale does not B Private sale requires a public announcement; auction sale does not C Auction sale is always conducted online; private sale is offline D Private sale is governed by the Sale of Goods Act; auction sale is not

Why: The key distinction is that auction sales involve competitive bidding, whereas private sales do not.

Question 175

Question bank

Which of the following best describes an absolute auction?

A An auction where goods are sold regardless of the bid amount B An auction where the seller reserves the right to refuse the highest bid C An auction conducted only for government property D An auction where bids are submitted secretly

Why: An absolute auction is one where goods are sold to the highest bidder regardless of the bid amount, with no reserve price.

Question 176

Question bank

Which of the following statements about the role of the auctioneer is correct?

A The auctioneer is the principal in the sale transaction B The auctioneer acts as an agent of the seller C The auctioneer is responsible for paying the purchase price D The auctioneer guarantees the quality of goods

Why: The auctioneer acts as an agent of the seller, conducting the sale and accepting bids on their behalf.

Question 177

Question bank

If a bidder withdraws their bid before the fall of the hammer, what is the legal effect?

A The bid is irrevocable and binding B The bid is revoked and no contract arises from it C The bidder must pay damages to the seller D The auctioneer can accept the bid despite withdrawal

Why: A bid can be revoked before acceptance (fall of the hammer), so no contract arises from the withdrawn bid.

Question 178

Question bank

In an auction sale, when is the contract considered to be formed?

A When the highest bid is made by a bidder B When the auctioneer accepts the highest bid by the fall of the hammer C When the buyer pays the purchase price D When the goods are delivered to the buyer

Why: The contract is formed when the auctioneer accepts the highest bid, usually indicated by the fall of the hammer.

Question 179

Question bank

Which of the following rights does the buyer acquire immediately upon acceptance of the highest bid in an auction sale?

A Right to possess and ownership of goods B Right to revoke the bid C Right to return the goods D Right to resell the goods before payment

Why: Upon acceptance of the highest bid, the buyer acquires the right to possess and ownership of the goods.

Question 180

Question bank

Under the Sale of Goods Act, 1930, which of the following is true regarding auction sales without reserve?

A The seller can refuse the highest bid B The goods must be sold to the highest bidder C The auctioneer can set a minimum price secretly D The buyer must pay only if the goods are delivered

Why: In an auction without reserve, the goods must be sold to the highest bidder.

Question 181

Question bank

Which of the following best distinguishes auction sale from private sale?

A Auction sale involves public competitive bidding; private sale does not B Private sale requires a public announcement; auction sale is private C Auction sale is always conducted online; private sale is offline D Private sale is governed by a different law than auction sale

Why: Auction sales involve public competitive bidding, whereas private sales are negotiated privately without bidding.

Question 182

Question bank

Which of the following statements about acceptance in auction sale is correct?

A Acceptance occurs when the highest bid is made B Acceptance occurs when the auctioneer announces the sale C Acceptance occurs when the buyer pays the price D Acceptance occurs when the goods are delivered

Why: Acceptance occurs when the auctioneer announces the sale, usually by the fall of the hammer.

Question 183

Question bank

Match the following auction types with their correct descriptions:

A A. Absolute auction - Goods sold regardless of price; B. Reserve auction - Minimum price set; C. Silent auction - Bids submitted secretly; D. Dutch auction - Price decreases until sold B A. Reserve auction - Goods sold regardless of price; B. Absolute auction - Minimum price set; C. Dutch auction - Bids submitted secretly; D. Silent auction - Price decreases until sold C A. Silent auction - Goods sold regardless of price; B. Dutch auction - Minimum price set; C. Absolute auction - Bids submitted secretly; D. Reserve auction - Price decreases until sold D A. Dutch auction - Goods sold regardless of price; B. Silent auction - Minimum price set; C. Reserve auction - Bids submitted secretly; D. Absolute auction - Price decreases until sold

Why: Absolute auction means goods are sold regardless of price; reserve auction has a minimum price; silent auction involves secret bids; Dutch auction price decreases until sold.

Question 184

Question bank

Which of the following statements about the legal principles of sale by auction is TRUE?

A The auctioneer is the principal in the sale transaction B The highest bid is always accepted regardless of reserve price C The contract is formed when the auctioneer accepts the highest bid D The bidder can revoke the bid after the fall of the hammer

Why: The contract of sale by auction is formed when the auctioneer accepts the highest bid.

Question 185

Question bank

A bidder placed a bid of \( \text{₹} 50,000 \) but withdrew it before the fall of the hammer. What is the legal consequence?

A The bid remains binding and cannot be withdrawn B The bid is revoked and no contract arises from it C The bidder must pay damages to the seller D The auctioneer can accept the bid despite withdrawal

Why: A bid can be revoked before acceptance (fall of the hammer), so withdrawal is valid and no contract arises.

Question 186

Question bank

Which of the following best explains the transfer of ownership in a sale by auction with reserve price?

A Ownership transfers immediately upon highest bid B Ownership transfers only when the reserve price is met and bid accepted C Ownership transfers after payment is made D Ownership transfers when goods are delivered

Why: In a reserve auction, ownership transfers only when the reserve price is met and the bid is accepted by the auctioneer.

Question 187

Question bank

Which of the following best describes the rights and duties of the auctioneer in an auction sale?

A The auctioneer must guarantee the quality of goods sold B The auctioneer has the duty to conduct the sale fairly and accept the highest bid C The auctioneer is liable for any defects in the goods D The auctioneer can refuse the highest bid without reason

Why: The auctioneer must conduct the sale fairly and accept the highest bid unless there is a reserve price or other valid reason.

Question 188

Question bank

Which of the following statements is correct regarding acceptance in auction sales under the Sale of Goods Act, 1930?

A Acceptance can be made by the seller at any time B Acceptance is signified by the fall of the hammer by the auctioneer C Acceptance occurs when the buyer pays the price D Acceptance is not necessary in auction sales

Why: Acceptance in auction sales is signified by the fall of the hammer by the auctioneer, completing the contract.

Question 189

Question bank

Which of the following best applies the principle of contract formation in an auction sale scenario: A bidder offers \( \text{₹} 1,00,000 \) but the auctioneer refuses to accept the bid. Is a contract formed?

A Yes, contract is formed as bid was made B No, contract is not formed until auctioneer accepts the bid C Yes, contract is formed when bidder offers the price D No, contract is formed only after payment

Why: In auction sales, contract formation depends on acceptance by the auctioneer; mere bidding does not form a contract.

Question 190

Question bank

Which of the following statements about the distinction between auction sale and private sale is FALSE?

A Auction sale involves public bidding; private sale does not B Private sale is always conducted online; auction sale is offline C Auction sale requires acceptance by the auctioneer; private sale requires mutual consent D Auction sale typically involves multiple bidders; private sale involves negotiation between two parties

Why: Private sale is not always online; it can be conducted offline as well. This statement is false.

Question 191

Question bank

Which of the following best explains the revocation of bids in an auction sale scenario: A bidder bids \( \text{₹} 75,000 \) but immediately withdraws the bid before the hammer falls. What is the legal position?

A The bid is irrevocable and binding on the bidder B The bid is revoked and no contract arises from it C The bidder must pay damages for breach of contract D The auctioneer can accept the bid despite withdrawal

Why: A bid can be revoked before acceptance (fall of the hammer), so withdrawal is valid and no contract arises.

Question 192

Question bank

Assertion (A): In an auction sale, the contract is complete only when the auctioneer accepts the highest bid.
Reason (R): The acceptance by the auctioneer is signified by the fall of the hammer.
Which of the following is correct?

A Both A and R are true and R is the correct explanation of A B Both A and R are true but R is not the correct explanation of A C A is true but R is false D A is false but R is true

Why: The contract of sale by auction is complete only when the auctioneer accepts the highest bid, which is signified by the fall of the hammer.

Question 1

PYQ 1.0 marks

Delivery is the ______ transfer of possession from one person to another.

Try answering in your head first.

Model answer

voluntary

More: Delivery under Section 2(2) of the Sale of Goods Act, 1930, is defined as the **voluntary transfer of possession** from one person to another. It must be consensual and intentional, distinguishing it from forcible or involuntary transfers. Actual delivery involves physical handover; symbolic delivery involves transfer of documents or keys; constructive delivery occurs when goods are pointed out for the buyer's taking. The voluntary nature ensures it aligns with the contractual intent of performance.

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