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Unit 12: Hire Purchasing
2. When the goods are sold by description by a manufacturer or seller who deals in goods of Notes
that description, the seller is bound to deliver the goods of merchantable quality.
3. When the purpose for which the goods are purchased is implied from the conduct of the
parties or from the nature or description of the goods, the condition of quality or fitness
for that particular purpose is annexed by the usage of trade.
4. When the seller either fraudulently misrepresents or actively conceals the latent defects.
Transfer of property in goods: The property in goods is said to be transferred from the seller to
the buyer when the latter acquires the proprietary rights over the goods and the obligations
linked thereto. The transfer of property in goods is the essence of a contract of sale.
The moment when the property in goods passes from the seller to the buyer is significant from
the point that risks associated with the goods follow the ownership, irrespective of the delivery.
If the goods are damaged or destroyed, the loss is borne by the person who is the owner of the
goods at the time of damage or destruction. The two essential requirements for transfer of
property in the goods are:
1. Goods must be ascertained and
2. The parties must intend to pass the property in the goods.
Performance of a sale contract: Performance of a sale contract implies, as regards the seller to
deliver the goods, and as regards the buyer to accept the delivery and make payment for them,
in accordance with the terms of the contract. Unless there is a contract to the contrary, delivery
of the goods and payment of the price are concurrent conditions and are to be performed
simultaneously.
Delivery of goods: 'Delivery' means 'voluntary transfer of possession of goods from one person
to another'. Delivery may be (a) actual (b) symbolic or (c) constructive.
Delivery is said to be actual when the goods are handed over physically. A symbolic delivery
takes place where the goods are bulky and incapable of actual delivery.
Example: A car is delivered by handing over the keys to the buyer.
A constructive delivery is a delivery by attornment which takes place when the person in
possession of the goods acknowledges that he holds the goods on behalf and at the disposal of
the other person.
Acceptance of delivery: The buyer is said to have accepted the goods, when he signifies his assent
that he has received the goods under, and in performance of the contract of sale. A buyer cannot
reject the goods after he has accepted them. A buyer is deemed to have accepted the goods, when:
1. He intimates to the seller, his acceptance, or
2. He retains the goods, beyond a reasonable time, without intimating to the seller that he
has rejected them, or
3. He does any act in relation to the goods which is consistent with the ownership of the
seller.
Hire Purchase Agreement
A hire purchase agreement is in many ways similar to a lease agreement, in so far as the terms
and conditions are concerned.
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