Sale of Goods MCQ Quiz - Objective Question with Answer for Sale of Goods - Download Free PDF

The correct answer is 'Section 16 of the Sale of Goods Act, 1930'

Key Points

• Implied conditions as to quality or fitness of goods (Section 16):
  • Under Section 16 of the Sale of Goods Act, 1930, there is an implied condition regarding the quality or fitness of goods for a particular purpose when the buyer relies on the seller's skill or judgment.
  • This section ensures that goods sold are of merchantable quality and fit for the purpose for which the buyer intends to use them, provided such purpose is made known to the seller.
  • However, the implied condition does not apply if the buyer examines the goods and the defect is apparent or if the buyer purchases goods under their own expertise without relying on the seller.
  • The provision protects buyers, especially when goods are purchased based on trust in the seller's knowledge or expertise.

Additional Information

• Explanation of other sections:
  • Section 14: This section deals with the implied undertaking by the seller that they have the right to sell the goods and that the buyer shall enjoy quiet possession of the goods. It primarily focuses on the title of the goods and does not cover quality or fitness.
  • Section 15: It deals with the sale of goods by description. According to this section, when goods are sold based on a description, the goods must correspond with the description. It does not specifically address quality or fitness.
  • Section 17: This section pertains to sales by sample. It establishes an implied condition that the bulk of the goods must correspond with the sample provided and must be free from defects. It is distinct from quality or fitness under Section 16.
• Importance of Section 16:
  • Section 16 is crucial for protecting consumer rights by ensuring that the buyer receives goods that meet their intended purpose and are of acceptable quality.
  • It emphasizes the seller's responsibility to deliver goods that meet the buyer's expectations based on their reliance on the seller's expertise.

The correct answer is ' option 4 '

Key Points

• Document of title to goods under the Sale of Goods Act, 1930:
  • The term "document of title to goods" as defined in Section 2(4) of the Sale of Goods Act, 1930, refers to documents that are used in the ordinary course of business as proof of the possession or control of goods, authorizing the possessor to transfer the goods described in the document.
  • These documents are essential in commercial transactions as they facilitate the transfer of ownership and possession without the need for physical delivery of the goods.

Additional Information

• Warehouse keeper's certificate:
  • This is a document issued by a warehouse keeper certifying that certain goods are stored in the warehouse. It serves as proof of possession and can be transferred to authorize the transfer of goods.
• Railway receipt:
  • This document is issued by railway authorities acknowledging the receipt of goods for transport. It acts as evidence of the goods being handed over and can be used to claim the goods upon delivery.
• Bill of lading:
  • This is a document issued by a carrier to acknowledge the receipt of cargo for shipment. It serves three main purposes: a receipt for the goods, a document of title, and a contract for the carriage of goods.
• Importance of these documents:
  • All these documents are crucial in trade and commerce as they facilitate the smooth transfer of goods and ensure legal rights over the goods are properly documented and can be transferred efficiently.

The correct answer is 'State of goods in which buyer is bound to take delivery'

Key Points

• Deliverable State:
  • The term "deliverable state" as per section 2(3) of the Sale of Goods Act 1930 refers to the condition of goods in which the buyer is legally bound to accept delivery.
  • Goods must be in a condition that allows the buyer to take delivery without requiring any further actions or alterations.
  • This ensures that the buyer can receive and use the goods as intended at the time of sale.

Additional Information

• Identified Goods:
  • Identified goods are specific goods that have been agreed upon at the time of the contract of sale.
  • While identified goods are necessary for a sale to occur, they do not necessarily mean that the goods are in a deliverable state.
• Ascertained Goods:
  • Ascertained goods are goods that are specifically identified and agreed upon after the contract of sale is made.
  • Like identified goods, ascertained goods must be put into a deliverable state before the buyer is obliged to take delivery.
• Goods Out for Delivery:
  • Goods out for delivery are those that are in the process of being delivered to the buyer.
  • However, the term does not specifically address the condition of the goods, which is the focus of the deliverable state.

The correct option is 'A - II, B - I, C - III, D - IV'.

Key Points

• Unpaid seller (A - II: S.45 of Sale of Goods Act, 1930)
  • The unpaid seller is defined under Section 45 of the Sale of Goods Act, 1930.
  • An unpaid seller is a person to whom the whole of the price has not been paid or tendered.
• Caveat emptor and its exceptions (B - I: S.16 of Sale of Goods Act, 1930)
  • Caveat emptor means "let the buyer beware".
  • Section 16 of the Sale of Goods Act, 1930, deals with the principle of caveat emptor and its exceptions.
• Minor admitted to benefits of partnership (C - III: S.30 of Indian Partnership Act, 1932)
  • Section 30 of the Indian Partnership Act, 1932, deals with minors being admitted to the benefits of partnership.
  • A minor can be admitted to the benefits of an existing partnership with the consent of all the partners.
• Registration of partnership (D - IV: S.69 of Partnership Act, 1932)
  • Section 69 of the Indian Partnership Act, 1932, deals with the registration of firms.
  • It specifies the procedure and implications of registering a partnership firm.

Therefore the correct pairing is:

A - II: Unpaid seller - S.45 of Sale of Goods Act, 1930

B - I: Caveat emptor and its exceptions - S.16 of Sale of Goods Act, 1930

C - III: Minor admitted to benefits of partnership - S.30 of Indian Partnership Act, 1932

D - IV: Registration of partnership - S.69 of Partnership Act, 1932

The correct answer is Option 1.

Key Points

Option 1) A, B, C, D

The sequence of provisions in Chapter III of the Sale of Goods Act, 1930 is as follows:

1. Property in goods passes when they are ascertained (Section 18): It emphasizes that the goods must be identified and ascertained for the property to pass.
2. Property in goods passes when the buyer and seller intend it to pass (Section 19): This sets the general principle that property in goods passes as per the intention of the parties.
3. In case of specified goods in a deliverable state, property in goods passes when the contract is made (Section 20): This provision applies specifically to certain scenarios involving specified goods.
4. Risk prima facie passes with property (Section 26): This highlights the principle that risk in goods typically transfers to the buyer when the property is transferred.

The correct answer is Option 2.

Key Points

• Chronological Order as per the Sale of Goods Act, 1930:

  • C. Conditions and warranties
    • These are covered in Chapter III, Sections 11-17.
  • B. Transfer by non-owners
    • This is covered under Section 27.
  • A. Rights of Unpaid seller
    • These rights are outlined in Chapter V, Sections 45-54.
  • D. Auction sale
    • This is covered under Section 64.

Understanding the order of these provisions helps in navigating the Sale of Goods Act, 1930 effectively.

The correct option is 'A - II, B - I, C - III, D - IV'.

Key Points

• Unpaid seller (A - II: S.45 of Sale of Goods Act, 1930)
  • The unpaid seller is defined under Section 45 of the Sale of Goods Act, 1930.
  • An unpaid seller is a person to whom the whole of the price has not been paid or tendered.
• Caveat emptor and its exceptions (B - I: S.16 of Sale of Goods Act, 1930)
  • Caveat emptor means "let the buyer beware".
  • Section 16 of the Sale of Goods Act, 1930, deals with the principle of caveat emptor and its exceptions.
• Minor admitted to benefits of partnership (C - III: S.30 of Indian Partnership Act, 1932)
  • Section 30 of the Indian Partnership Act, 1932, deals with minors being admitted to the benefits of partnership.
  • A minor can be admitted to the benefits of an existing partnership with the consent of all the partners.
• Registration of partnership (D - IV: S.69 of Partnership Act, 1932)
  • Section 69 of the Indian Partnership Act, 1932, deals with the registration of firms.
  • It specifies the procedure and implications of registering a partnership firm.

Therefore the correct pairing is:

A - II: Unpaid seller - S.45 of Sale of Goods Act, 1930

B - I: Caveat emptor and its exceptions - S.16 of Sale of Goods Act, 1930

C - III: Minor admitted to benefits of partnership - S.30 of Indian Partnership Act, 1932

D - IV: Registration of partnership - S.69 of Partnership Act, 1932

Key Points

Correct Answer: 4. At the time agreed upon in the contract by the seller and the buyer for the transfer of property

Explanation: The transfer of property in goods from seller to buyer under the Sale of Goods Act is a principal concept that determines when the ownership (or property) of the goods shifts from the seller to the buyer. This transition point is crucial for determining the risk responsibilities and rights of both parties. Unlike physical possession (A) or payment completion (C), which can influence the contractual relationship, the exact moment when the property in goods is transferred is specifically based on the terms agreed upon in the contract (D). This allows for flexibility in commercial transactions and acknowledges that physical delivery or payment may not always coincide with the transfer of ownership. The contract can stipulate distinct conditions or actions triggering this transfer, thereby underscoring the consensual nature of contractual transactions (B) but emphasizing the agreed-upon conditions for transfer (D).

The correct answer is Option 1.

Key Points

Option 1) A, B, C, D

The sequence of provisions in Chapter III of the Sale of Goods Act, 1930 is as follows:

1. Property in goods passes when they are ascertained (Section 18): It emphasizes that the goods must be identified and ascertained for the property to pass.
2. Property in goods passes when the buyer and seller intend it to pass (Section 19): This sets the general principle that property in goods passes as per the intention of the parties.
3. In case of specified goods in a deliverable state, property in goods passes when the contract is made (Section 20): This provision applies specifically to certain scenarios involving specified goods.
4. Risk prima facie passes with property (Section 26): This highlights the principle that risk in goods typically transfers to the buyer when the property is transferred.

The correct answer is 'sale by buyer in possession before sale.'

Key Points

• Sale by buyer in possession before sale:
  • This refers to a situation where the buyer, who is in possession of the goods, sells them before the actual sale has been completed.
  • In such cases, the buyer acquires a better title to the goods, even if the seller was not the owner, provided the buyer acted in good faith and without notice of the seller's lack of authority.
  • This is based on the principle of estoppel, where the true owner is precluded from denying the buyer's right to the goods due to the conduct of allowing the possession of the goods by the seller.

Additional Information

• Owner by his conduct precluded from denying the seller's authority to sell:
  • This situation occurs when the owner, through their conduct, allows the impression that the seller has the authority to sell the goods. However, this does not always guarantee a better title to the buyer.
• Sale is by mercantile agent:
  • A mercantile agent can sell goods only if they are in possession of the goods with the consent of the owner, and the sale is made in the ordinary course of business. This does not cover all scenarios where the buyer acquires a better title.
• Sale by a person in possession under a voidable contract:
  • If a person is in possession of goods under a voidable contract and the contract has not been rescinded at the time of the sale, the buyer may acquire a good title. However, this is a specific case and not a general rule.

The correct answer is 'The seller must be UPS u/s 45 and the buyer becomes insolvent and the seller departed with the possession of goods'

Key Points

• Right to Stoppage in Transit:
  • This right is provided under Section 46 of the Sale of Goods Act, 1930.
  • It allows an unpaid seller to stop the goods in transit if certain conditions are met.
  • This right ensures that the seller can protect their interest if the buyer becomes insolvent.
• Conditions for Exercising the Right:
  • The seller must be an unpaid seller as defined under Section 45 of the Sale of Goods Act, 1930.
  • The buyer must become insolvent.
  • The seller must have parted with the possession of the goods.

Additional Information

• Explanation of Incorrect Options:
  • Option 1: Simply being an unpaid seller under Section 45 is not enough; other conditions must also be met.
  • Option 2: Although it mentions the seller must be an unpaid seller and have parted with possession, it does not include the crucial condition of buyer insolvency.
  • Option 3: This option correctly mentions the seller being an unpaid seller and the buyer's insolvency but omits the requirement that the seller must have parted with the possession of goods.

Key Points

Correct Answer: 3. A buyer purchases a batch of apples for immediate consumption, but upon delivery, they are found to be unripe.

Explanation: In Sale of Goods contracts, conditions relating to the quality or fitness of goods are crucial for ensuring that the buyer receives what they have contracted for in terms of the purpose or quality explicitly or implicitly made known to the seller. Option 3 directly addresses a breach of this condition. The buyer’s intention to consume the apples immediately is indicative of an expectation of a certain quality (ripe enough for immediate consumption), which the goods failed to meet upon delivery, hence constituting a breach of condition as to quality or fitness. In contrast, option A involves suitability for a specific purpose, which may not explicitly constitute a quality or fitness breach unless it was clearly communicated to and accepted by the seller as the purpose of the sale. Option 2 represents a breach of description rather than quality or fitness. Option 4 constitutes a delay in delivery, which is an entirely different kind of breach related to the performance of the contract rather than the quality or fitness of the goods sold.

The question asks to match specific sections of the Sale of Goods Act, 1930 with their respective concepts. The correct match, as provided, is option 4. Below is a detailed explanation of each match:

Key PointsSpecific goods in a deliverable state (A - III)
Section 20, Sale of Goods Act, 1930: This section deals with the passing of risk and property in specific goods. It outlines that, unless otherwise agreed, the risk passes with the property, and when the goods are in a deliverable state, the property in the goods passes to the buyer when the contract is made. This is crucial for understanding when the responsibility for the goods shifts from the seller to the buyer.
Auction sale (B - I)
Section 64, Sale of Goods Act, 1930: This section specifically addresses the conditions and effects of sale by auction. It includes details such as the auctioneer's right to bid, the completion of the sale upon the fall of the hammer, and circumstances under which the sale may be subject to a right of reserve or upset price.
Remedy for breach of warranty (C - IV)
Section 59, Sale of Goods Act, 1930: This section outlines the remedies available to a buyer in the event of a breach of warranty by the seller. It explains that the breach of warranty gives rise to a claim for damages but does not entitle the buyer to reject the goods and treat the contract as repudiated.
Sale by one joint owners (D - II)
Section 28, Sale of Goods Act, 1930: This section deals with the rules regarding the sale by one of joint owners of goods. It specifies the conditions under which one co-owner can sell goods without the permission of the others, typically requiring the buyer to act in good faith and without notice of the seller's lack of authority.
In summary, the correct matches (option 4) reflect specific provisions of the Sale of Goods Act, 1930 that address the passing of property in specific goods, the rules governing auction sales, the remedies available for breach of warranty, and the sale of goods by joint owners. Each section provides a legal framework for these distinct aspects of sales transactions, ensuring clarity and protection for both buyers and sellers.

Key Points

• The term "fault" within the context of the Sale of Goods Act, 1930, specifically refers to a "wrongful act or default."
• This definition emphasizes the legal responsibility of the seller regarding any act or omission that leads to a breach of the contract provisions pertaining to the sale of goods.
• Such wrongful acts or defaults can include a range of actions or failures to act that result in the goods not meeting the contractual standards or specifications agreed upon between the buyer and seller.
• It encompasses scenarios where the goods delivered are defective, not as described, or fail to meet the quality or quantity stipulated in the contract.
• The recognition of "fault" in this context is fundamental to determining liability and ensuring that the aggrieved party (typically the buyer) can seek redress through remedies available under the Act, such as replacement, repair, or financial compensation.
• This definition underpins the Act's protective measures for buyers, ensuring that they receive the benefit of their bargain and maintain trust in commercial transactions.

Key Points 

According to Section 5(2) of Sale of Goods Act, 1930 : Contract of sale how made.

Subject to the provisions of any law for the time being in force, a contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth or may be implied from the conduct of the parties.

Therefore, Option 4 is correct.