Transfer of property as between seller and buyerCentral

Section 21 of The Sale of Goods Act, 1930

Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof.

Summary

Ownership does not pass to the buyer immediately if the seller still has work to do on the items.
This rule applies when a contract involves specific goods that the seller is required to finish or prepare.
The seller must be bound by the contract to do something to the items to put them in a deliverable state.
Ownership stays with the seller until that specific work or task is actually completed.
Ownership only moves to the buyer after the work is done and the buyer has been notified.

Practical examples

1David buys a specific antique clock from Elena on September 5 for 300 dollars. Elena agrees she must replace a broken spring in the clock before David takes it. David only becomes the owner once Elena fixes the spring and calls David to let him know it is ready.

2Fiona buys a specific customized bicycle from a shop on October 1. The shop must still attach the custom pedals and seat before it is considered ready. Fiona remains a non-owner until the shop finishes the assembly and sends her an email confirming the bike is ready for pickup.

FAQ

1. What happens to ownership under Section 21 of the Sale of Goods Act, 1930, if the seller is fixing the goods?

Under Section 21 of the Sale of Goods Act, 1930, ownership does not pass to the buyer until the seller finishes the work and informs the buyer.

2. Does finishing the work on the goods automatically transfer ownership under Section 21 of the 1930 Act?

No, Section 21 of the Sale of Goods Act, 1930, requires both that the work be done and that the buyer receives notice of it.

Test yourself

Q1.Under Section 21 of the Sale of Goods Act, 1930, which two conditions must be met before ownership passes to the buyer?

Q2.If a seller finishes putting goods into a deliverable state but the goods are destroyed before the buyer is notified, who owns them under Section 21 of the 1930 Sales Act?

Q3.To which type of goods does Section 21 of the Sale of Goods Act, 1930, apply?

Q4.Under Section 21 of the Sale of Goods Act, 1930, what does "deliverable state" mean?

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