Chapter 4: Contract of Sales of Goods

April 20, 2022April 22, 2022 Study Notes NepalPosted in BBS, 3rd YearTagged bbs 3rd year, Contract of Sales of Goods, studynotes nepal

Table of Contents

Very Short Question Answer

1. What is meant by goods?

The term goods refers all the movable properties other than the land and attached to the land. Therefore, growing crops is not goods but when harvested it amounts a goods. A living tree is not goods but it is severed from the land amounts to a goods.

2. When does a condition transform into a warrantee?

In the following situations a condition descended to a level of warranty:

Voluntary waiver of condition
Acceptance of goods by buyer
By impossibility or other reason

3. What do you understand by merchantability?

The term merchantable quality refers that the goods should be such as they are commercially saleable under the description by which they are known in the market at their full value.

4. Define the term caveat emptor.

The English translation of the term ‘caveat emptor’ is ‘let the buyer beware’. The doctrine of caveat emptor makes liable the buyer careful while selecting the goods whether the goods shall be fit for his particular purpose or not.

5. What is constructive delivery?

When, a third person who is in possession of the goods of the seller at the time of sale acknowledges to the buyer that he holds the goods on his behalf, it is called the constructive delivery. In such cases, there is a change in the legal character of the possession without any change in the actual and visible custody.

Short Question Answer

1. What is ‘Caveat emptor’? Are there any exceptions to its application to the sale of goods?

‘Caveat emptor’ means ‘let the buyer beware’, i.e. in a contract of sale of goods the seller is under no duty to reveal undisclosed defects about the goods sold. Therefore, when a person buys some goods, he must examine them thoroughly. If the goods turn out to be detective or do not suit his purpose or if he depends upon his own skill or judgment and makes a bad selection, he cannot blarne any body. Thus the rule is that there is no implied condition or warranty as to the quality or fitness for any particular purpose of goods supplied under the contract of sale of goods.

EXCEPTIONS

The doctrine of caveat emptor has certain important exceptions, these exceptions are as follows:

Fitness for buyer’s purpose: Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which he requires the goods and relies on the seller’s skill or judgment and the goods are of a description, the seller must supply the goods which shall be fit for the buyer’s purpose.
Sale under a patent or trade name: In such case there is no implied condition that the goods shall be reasonably fit for any particular purpose.
Merchantable quality: Where goods are bought by description from a seller who deals in goods of that description there is an implied condition that the goods shall be merchantable quality, or fit.
Usage of trade: An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.
Consent by fraud: Where the consent of the buyer, is obtained by the seller by fraud or concealment of facts the doctrine of caveat emptor does not apply.

2. Explain any four cases where a non-owner can give the transferee a valid title to the goods.

A non-owner to the goods can not sale it to other because he has no title on the goods. If he has sold the goods it becomes void. Hence, the person who can sold the goods is the true owner of the goods. Thus, sale by non-owner is void. But in some cases even non-owner can create a valid sale.

CASES WHEN NON-OWNER CAN SALE THE GOODS

Sale by mercantile agent: Where a mercantile agent is in possession of goods or documents with the consent of owner, sales them to another it becomes valid; provided that he must act in the course of business and the buyer must act in good faith.
Sale by seller or buyer in possession after sale: In such a case if buyer act in good faith and without notice of sale such sale becomes valid.
Sale where pawnor has a limited interest: Where a person sales goods in which he has only a limited interest, the sale is valid to the extent of that interest; example; a finder of lost goods may sale them to the extent of his interest.
Sale by a co-owner in possession: One of the several co-owners of goods in possession there of with the assent of the other co-owners may create a valid sale of the goods.
Sale by person in possession under a voidable contract: Where a person obtains possession of goods under a voidable contract, the sale created by him is valid provide:
The contract has not been rescinded before the contract of sale.
The pawnee act in good faith and without notice of the pawnor’s defect of title.

3. What are the essentials of a valid contract for the sale of goods?

A contract of sale of goods is a contract whereby seller transfers or agrees to transfer the property. in goods to the buyer for price. If there is no transfer of property form seller to buyer there is no contract of sale of goods and such is to be done for price. Where the property in goods is transferred from the seller to the buyer mean-time, the contract is called a sale; but where the transfer of property in the goods is to take place at a future time or subject to some conditions to be fulfilled, the contract is called an agreement to sell. Transfer of property in goods for a price is an essence of the definition of sale of goods.

ESSENTIALS OF A VALID SALE OF GOODS

The following essential elements are necessary for a valid contract of sale of goods:

Two parties: As like other contracts there must be two distinct parties, i.e. a buyer and a seller and the parties must be competent to contract. Seller means a person who sells or agrees to sell goods. And, Buyer means a person who buys or agrees to buy the goods under a contract of sale.
Goods: The subject matter of contract necessarily be of goods. Goods means and included all the moveable properties except than land and attached to the land. Growing crops are goods if they are to be severed at the time of performance of contract. Transfer of immovable property is not regulated by the rule of contract of sale of goods.
Transfer of general property: There must be a transfer of general property as distinguished form special property in good from seller to the buyer. Means, when a goods is purchased by buyer from seller, the buyer must be the owner of goods. Until and unless there is transfer of property in goods there is not contract of sale of goods.
Price: The consideration for the contract of sale called price, must be or monetary form. When goods are exchanged for goods, it is not sale but a barter. There is, however, nothing to prevent the consideration form being party in money and party in goods. money
Essential elements of a valid contract: The contract of sale of goods to be a valid must be satisfied all the essential element of a valid contract, for example, offer & acceptance, legality of object and consideration, possibility of performance certainty or clarity, free consent etc.

3. Define sale of goods and explain the implied conditions under the contract of sale of goods.

MEANING OF SALE OF GOODS

A contract of sale of goods is a contract whereby seller transfers or agrees to transfer the property in goods to the buyer for price. If there is no transfer of property form seller to buyer there is no contract of sale of goods and such is to be done for price. Where the property in goods is transferred from the seller to the buyer mean-time, the contract is called a sale; but where the transfer of property in the goods is to take place at a future time or subject to some conditions to be fulfilled, the contract is called an agreement to sell. Transfer of property in goods for a price is an essence of the definition of sale of goods.

IMPLIED CONDITION

Implied condition as to title: In a contract of sale unless the circumstances of the contract are such as to show a different intention, there is an implied condition on the part of the seller that:
In case of a sale, he has right to sell the goods and,
In case of an agreements to sell, he will have right to sell the goods at the time when the property is to pass.
Implied condition as to sale by description: Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description.
Implied condition as to sale by sample: If goods are sold by sample, the whole bulk of goods must correspond with the sample; and the buyer has right to confirm whether the bulk is correspond with the sample or not.
Implied condition as to quality or fitness: Normally, in sale there is no any condition as to quality or fitness. The buyer himself must examine the goods thoroughly. But in certain cases, there is a condition as to quality of fitness, for example: If the buyer, expressly or impliedly makes known to the seller the particular purpose for which he needs the goods and depends upon the skill and judgment of seller, there is an implied condition that the goods shall be reasonably fit for that purpose.
Implied condition as to merchantability: Where the goods are bought by description, there is an implied condition that the goods are of merchantable quality; for example: ‘M’ asked for a bottle of wine at ‘F’ shop, which was licensed for the sale of wines. While ‘M’ was drawing the cork, the bottle broke and ‘M’ was injured. Held, the sale was by description and ‘M’ was entitled to recover damages as the bottled was not of merchantable quality.
Condition implied by custom: An implied-condition as to quality of fitness for a particular purpose may be annexed by the usage of trade; eg. ‘G’ purchased a woolen underwear form ‘M’ whose business was to sell goods of that description. After wearing the underwear, ‘G’ got skin disease. Held, the goods were not fit for use and G was entitled to avoid the contract and claim damages.
Implied conditions as to wholesomeness: In the case of eatable and provisions, in addition to the implied condition as to merchantability, there is another implied condition that the goods shall be wholesome. i.e. the goods must medically fit to eat.

In Forst v. Aylesbury Dariry Co. Ltd. 1905, ‘F’ bought milk from ‘A’. The milk contained germs of typhoid fever. F’s wife took the milk and got infection as a result of which she died. Held, ‘F’ could recover damages as the milk was not fit to eat.

4. Define the term goods. Distinguish between specifics and unascertained goods.

The term goods means and includes all the movable properties except land and attached to the land. Goods form the subject-matter of a contract of sale. There must be some goods the ownership in which is or is to be transferred from the seller to the buyer. Goods means every kind of movable property other than actionable claims and money; and includes stocks, shares, growing crops, grass and things attached to forming part of land which are agreed to be severed before sale or under the contract of sale. Trade marks, copy rights, goodwill, electricity, water, breaks, gas are all goods.

SPECIFIC & UNASCERTAINED GOODS

There are different types of goods. For example: specific or ascertained goods, unascertained goods future goods or contingent goods etc. Specific or ascertained goods are those which are identified at the time of contract of sale. Similarly those goods which are not identified and agreed upon at the time of the contract of sale are called unascertained goods.

DIFFERENCE BETWEEN SPECIFIC & UNASCERTAINED GOODS

The differences between specific & unascertained goods are as follows:

Basis	Specific goods	Unascertained goods
Identification of goods	These are identified.	These are not identified.
Existence of goods	There are in existence at the time of agreement.	These are not in existenceat the time of agreement.
Transfer of property	Property in goods-transfers at the time when they intended.	Properly in goods transfer when the goods are ascertained
Buyer as owner	Buyer becomes owner at the time of agreement.	Buyer becomes owner after the time of agreement when goods are ascertained to buyer.
Types	These may be deliverable state or not in deliverables state.	There is no such types of these goods.
Liability of buyer	If there is loss buyer is liable.	If there is loss seller is liable.
Deliverable state	These goods can be delivered when asked by buyer.	These goods cannot be delivered when asked by the buyer.
Specification of goods	These are the goods which are agreed upon at the time of contract.	They are defined only by description and may from part of a lot.

5. Explain about the rules regarding the performance of contract of sale of goods.

The contract between two parties, namely, the seller and buyer where the seller transfers or agrees to transfer the ownership in goods to the name of the buyer for price. Therefore, it is the transfer of property in goods for price. As like other contracts, the contract of sale of goods is to be performed by both of the parties. The performance of contract of sale of goods means, as regards the seller, delivery of goods to the buyer and as regards the buyer, payment of price of the goods in accordance with the terms of the contract. Delivery means the voluntary transfer of possession of goods from one person to another. It may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or his agent.

RULES REGARDING PERFORMANCE OF THE CONTRACT OF SALE OF GOODS

The rules regarding performance of the contract of sale of goods are related towards the rules of delivery of goods and payment of the price. These rules can be mentioned as follows:

Time of performance: Where the contract has fixed the time for the performance of contract, the seller is bound to performed the contract, i.e., to deliver the goods to the buyer. Similarly, the buyer must make the payment of price.
Place of performance: Where the place at which the goods are to be delivered is specified at the time of agreement, the goods are to be delivered at the fixed place. And if the contract has not specified the place, the goods are to be delivered at the place where they were at the time of sale.
Delivery and payment is the concurrent condition: Unless otherwise agreed the delivery and payment of price of goods is the concurrent condition, i.e., delivery and payment must take place at the same time. At the time of performance of contract, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer shall be ready and willing to pay the price in exchange for the possession of the goods.
Effect of part delivery: Part performance or delivery is no performance. But a delivery of part of the goods in progress of the delivery of the whole has the same effect, for the purpose of passing the property in such goods, as the delivery of whole.
Cost of delivery: Unless otherwise agreed, all the expenses of and incidental to making of delivery are to be borne by the seller and all the expenses of and incidental to obtaining of delivery are to be borne by the buyer.
Delivery to a carrier: Where in pursuance of a contract of sale, the goods are delivered to a carrier for the purpose of transmission to the buyer, the delivery of the goods to the carrier is deemed to be the performance of contract.
Performance must be exact and absolute: The performance of contract should be strictly followed according to the terms of the contract. A defective delivery entitles the buyer to reject the goods..
Delivery may be actual, symbolic or constructive: Whether the delivery is actual, constructive or symbolic it should have the effect of putting the goods in the possession of the buyer of his duly authorized agent.
Who has to ask for performance: Unless otherwise agreed the buyer has to ask for the delivery of goods, therefore, the seller is not bound for the delivery of goods until it is asked for.

Long Question Answer

1. Who is an Unpaid Seller? Discuss the rights of the unpaid seller.

MEANING OF UNPAID SELLER

Seller is a party of a contract of sale of goods who transfer or agrees to transfer the property/ownership in the goods to the buyer or, the person who has got right or title to make a valid sell he is known as the seller of goods. A seller or goods is deemed to be an unpaid seller in the following two conditions:

Where the goods is soled to the buyer but the whole of the price has not been paid or tendered yet, and;
Where the buyer pays the price of goods by bill of exchange, or note or cheque or other negotiable instruments but the same has been promissory dishonored from the concerned party.

RIGHT OF AN UNPAID SELLER

The rights of an unpaid seller can be divided into two classifications. Firstly, rights of an unpaid seller as against the goods; and secondly, rights of an unpaid seller as against the buyer personally. A brief description of these rights of an unpaid seller is as follows:

1. Rights of an unpaid seller against the goods:

It includes:

a. Right of lien: A lien is a right to retain possession of goods until payment of the price. Where according to the contract, the payment of the price is a concurrent condition the seller may detain the goods until the whole price due to him is paid. To have a right of lien certain essentials must be proved:

Ownership must have been passed to be proved.
There must be no contract expressed in the contrary about this right.
The goods must be in the possession of the seller or under his control.
The price or part of the price must remain unpaid.
This right of lien is available only for the price of the goods, and not in respect of other charges.

b. Right of stoppage in transit: Where an unpaid seller has parted with the possession of goods but the goods have not yet actually come into the hands of the buyer, the law gives the seller a right to stop the goods in transit with a view to exercise his lien if the buyer has become insolvent. Thus, it is available to the unpaid seller:

When the goods are in transit.
When the price of goods is not paid.
When the buyer becomes insolvent.

If the goods are reached to the buyer’s control or possession who is insolvent the seller’s rights become ineffective, having no legal meaning.

c. Right of re-sale: An unpaid seller who has exercised his right of lien or has stopped the goods in transit is clothed with a further right of re-sale of the goods. The right of resale is a valuable right especially in case of a failing market. On resale, if there is a loss to the seller he can claim it form buyer as damaged for breach of contract.

The unpaid seller can re-sale the goods:

Where the goods are of a perishable nature;
Where he gives notice to the buyer of his intention to resale the goods and the buyer does not within a reasonable time pay or tender the price.

2 Rights of an Unpaid Seller against the Buyer: There are some rights which an unpaid seller may enforce against the buyer personally as follows:

a. Rights to sue for damages: Where the buyer neglects or refuses to accept and pay for the goods, the seller will have a right to sue for damages. This right to claim damages exists ordinarily in cases in which the property in goods has not passed to the buyer. In such cases, since the seller continues to be the owner of the goods and sell them to other party, he can also claim such damages if there is loss in case of resale of the goods.

b. Right to sue for price

Where property has passed: A suit for the recovery of the price lies if the property in the goods has passed to the buyer and the buyer has wrongfully neglected or refused to pay the price. In a suit for recovery of the price, if the passing property to the buyer is not establish, the seller cannot raise the point that the goods were wrongfully rejected.
Where ownership has not passed: Again, even though ownership in the goods has not passed to the buyer, if under the contract the buyer has agreed to pay the price on a certain day fixed, then the seller can file a suit to recover the price, even thought, the good are still in the seller’s possession and have not been delivered to the buyer.
Right to rescind the contract: If buyer repudiates the contract before the date of delivery, the seller can treat the contract as rescinded and file a case for damages for anticipatory breach.

2. ‘No one can give that what one has not got. How does this principle apply in the case of sale of goods? Discuss.

A contract of sale goods is a contract whereby the seller transfer or agrees to transfer the property in goods to the buyer for price. If there is no transfer of property i.e. ownership of the goods, from seller to buyer there is no contract of sale and such is to be done for price. Therefore, the transfer of property in goods for price is an essence of the contract of sale of goods. The valid transfer of property in goods becomes a valid contract of sale of goods. There are various rules regarding passing of property in goods from seller to buyer by which we can find that where there is transfer of property or not.

THE RULE ‘NO ONE CAN GIVE THAT WHAT ONE HAS NOT GOT’

The general rule of law regarding sale of goods is that the person who has not got ownership in the goods can not transfer it to the buyer, or the property in goods does not pass from such seller if he is a person of non-owner of the goods. This is expressed in a Latin maxim ‘nemodat qui non habet.’ i.e. ‘no one can give that one has not got. For example: If ‘A’ steals an article and sells it to ‘B’. ‘B’ does not become the owner of the goods. Only the owner can sell the goods and transfer property in goods. The buyer though he may have acted in good faith and paid the full price of goods, does not acquire any right in the goods. The basic objective of law is to protect the rights of true owner in the goods as against the fraudulent activities of other as against the owner’s property.

EXCEPTIONS TO THE RULE

The rule ‘nemo dat qui nonhabet’ is a basic rule in a contract of sale of goods. In case of sale of goods the seller must necessarily be owner of the goods or must have title in the goods. If the seller happens to be non-owner of goods he can not transfer the ownership to the buyer. This is however subject to certain exceptions:

1. Sale by a person having title by estoppel: Where the owner by his conduct or by an act or omission, leads the buyer to believe that the seller has authority to sell and induces the buyer to buy the good, he shall be stopped from denying the fact of want of authority of the seller. In such a case, the buyer get a better title than that of the seller. Example: ‘A’ tells to ‘B’ in the presence of ‘C’ that he is an agent of ‘C’ to sell the goods. ‘C’ can not avoid the contract on the ground that ‘A’ had no title at the time of contract. ‘C’ is stopped.

2. Sale by mercantile agent: The buyer of goods if has purchased the goods from a mercantile agent, who has no authority from the principal to sell, gets a good title to the goods if:

The agent is in possession of the goods with the consent of the owner.
The agent sells the goods while acting in the ordinary course of business of a mercantile agent and,
The buyer acts in good faith and purchases without notice of that.

3. Sale by one of several joint owners: If one of the several joint owners, who is in sole possession of the goods by the permission of the other co-owners, sells the goods, a buyer good faith gets a good title to the goods.

4. Sale by a person in possession under a avoidable contract: The buyer gets goods title if sale is made before the contract is rescinded and if the buyer acts in good faith without knowing the facts or prior irregularities.

5. Sale by seller in possession after sale: Where a seller, having sold goods continues to be in possession and sells them to a person who buys them in good faith and without notice of the previous sale, the buyer gets a good title. vi: Sale by an unpaid seller: Where an unpaid seller who has exercised his right of lien re-seller the goods, the buyer gets a good title to the goods.

6. Sale by a finder of ‘goods under certain conditions is treaded as valid sale of goods.

7. Sale by a Pawnee under certain conditions.

8. Sale by an official receiver or assignee or liquidator of a company. In these all cases if goods are sold by non-owner, the buyer gets title on the goods.

3. Define the term ‘Delivery’. Discuss the rules regarding delivery under the contract of sale of goods.

As regards the seller, delivery of the goods to the buyer in accordance with the terms of the contract of sale of goods is he performance of contract of sale. Delivery means voluntary transfer of possession of goods from one person to another. Delivery of goods may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or his agent. Delivery of goods may be

Actual delivery: Where the goods are handed over by the seller to the buyer or his duly appointed agent, the delivery is said to be actual. It may also be made by doing anything which has the effect of putting the goods in the possession of the buyer.
Symbolic delivery: Where goods are ponderous or bulky an incapable of actual delivery, e.g. Haystack in a meadow, a bulk of potatoes in a warehouse, the delivery may be symbolic. Handing over the key of a warehouse or the key of a motorcar to the buyer is symbolic delivery of the goods to the buyer.
Constructive delivery: Where a third person who is in possession of the goods of the seller or the seller himself at the time of sale agrees to the buyer that he holds the goods on behalf of the buyer. For example, A sells to B 100 bags of wheat lying in C’s godown. A gives an order to C, asking him to transfer the goods to B. C accepts to such order and transfers the goods in his books to B. This is a constructive delivery.

RULES AS TO DELIVERY OF GOODS

Delivery may be actual, symbolic or constrictive: It should have the effect of putting the goods in the possession of the buyer or his duly authorized agent.
Delivery and payment- concurrent condition: Unless otherwise agreed delivery of the goods and payment of the price are concurrent conditions, i.e. the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer shall be ready and willing to pay the price in exchange for possession of the goods.
Effect of part delivery: A delivery of part of the goods in progress of the delivery of the whole, has the same effect, for the purpose of passing the property in such goods, as delivery of the whole.
Buyer to apply for delivery: Unless otherwise agreed, the seller is not bound to delivery the goods until the buyer applies for delivery; and the buyer has no cause of action against the seller if he does not apply for delivery.
Place of delivery: Where the place at which delivery of goods is to take place is specified in the contract, the goods must be delivered at that place during the business hours on a working day. Where there is no specific agreement as to place of delivery, the goods are to be delivered at the place at which they are at the time of sale.
Time of delivery: Where there is a fixed agreement as to time of delivery the seller is bound to deliver the goods at that fixed date and time if it is essential. But where there is no time specified the seller must deliver the goods to the buyer within at a reasonable time.
Goods in possession of a third party: When at the time of the contract of sale the goods are with a third party, there is not delivery by the seller to the buyer until such third party acknowledges to the buyer that he holds the goods on his behalf.
Cost of delivery: Unless otherwise agreed, all expenses of and incidental to making of delivery are borne by the seller, but all expenses of and incidental to obtaining of delivery are born by the buyer.
Delivery of wrong quantity: The delivery of the quantity of goods contracted for should be strictly according to the terms of the contract. A defective delivery entitles the buyer to reject the goods.
Installment deliveries: Unless otherwise agreed, the seller is not entitled to deliver the goods by installments and if he does so, the buyer is not bound to accept the goods.
Delivery to a carrier: Where in pursuance of a contract of sale, the goods are delivered to a carrier for the purpose of transmission to the buyer, delivery of goods to the carrier is prima facie deemed to be a delivery of goods to the buyer.

4. How is a contract of sale made? How does the ownership transfer in a contract of sale of goods? Discuss.

Literally, the term sale refers transfer of ownership from one to another and goods refer any movable property other than land and attached to the land. Therefore, in simple words, the expression sale of goods refers the transfer of ownership in goods from one to another. In fact, it is a contract between seller and buyer where the seller transfers or agrees to transfer ownership in goods in the name of buyer for price. If the ownership in goods is transferred from seller to buyer for price or monetary consideration, it is called sale of goods. For the contract of sale of goods, there must be:

Seller and buyer.
Goods.
Transfer of ownership/property.
Price
Sale or agreement to sell.

TRANSFER OF OWNERSHIP IN A CONTRACT OF SALE OF GOODS

The matter of transfer of ownership is the most important for the contract of sale of goods because of two reasons:

It is an essential that unless there is transfer of property, there is no contract of sale.
If there is loss or destruction in the goods, question may arise about the person who will be responsible to that loss either seller or buyer. The general rule is that if there is loss in the goods before passing ownership to buyer, the seller is responsible for such loss and the loss has been occurred after transfer of ownership, the buyer is responsible. Therefore, the responsibility of the parties for loss or destruction in goods shall be determined by the matter of transfer of ownership.

RULES REGARDING THE TRANSFER OF OWNERSHIP

There are various rules or standard to determine the question whether there is transfer of ownership or not in the goods. Under the following rules or ways the ownership in goods transfers from seller to buyer: –

Unascertained goods: Where there is a contract for unascertained goods, the ownership in such goods does not transfer until and unless the goods is ascertained.
Specific/ascertained goods: Where there is a contract for ascertained goods, the ownership in such goods transfers at the time when the parties have intended. In other words, in such goods the property does transfer at the option of the parties i.e. the parties are free to fix the time, place, conditions and circumstances for the transfer of ownership in the goods..
Absence of expressed/implied intention: Where there is a contract for ascertained goods but there is no expressed/implied intention as to the transfer of property in goods, the ownership does pass as per the following rules:
Ascertained goods in a deliverable state: Where the ascertained goods is in a deliverable state, the ownership transfers immediately when the contract is made irrespective of payment or delivery of goods.
Ascertained goods not in a deliverable state: If the goods, at the time of contract, is not in a deliverable state because of some works, e.g. printing, packaging, leveling, pricing, weighing etc. remain to be put the goods in a deliverable state, the property in such goods passes from seller to buyer when
The goods is put in a deliverable state after completing the remaining works as mentioned above and;
The seller informs to the buyer that he has completed the works and thus the goods is in a deliverable state.
Contingent goods: Where there is a contract for contingent goods, the property in such goods does transfer on the happening or non-happening of the uncertain future event mentioned at the time of agreement.
Future goods: Where there is a contract for future goods, the property in such goods transfers only when the goods takes place as per the agreement and such is communicated by the seller to the buyer. E.g., A and B entered into a contract to supply 1000 tons of cement to be produced by A. B becomes the owner of such goods only after the goods is produced and informed by A to B.