Transfer of property as between seller and buyerCentral

Section 23 of The Sale of Goods Act, 1930

(1)Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may by given either before or after the appropriation is made. Delivery to carrier.—(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.

Summary

This section of the 1930 law applies when the items have not been specifically picked out yet or are going to be made in the future.
Ownership passes when goods that match the description and are ready for the buyer are unconditionally set aside for the contract.
This setting aside, or appropriation, must be done by the seller with the buyer's agreement or by the buyer with the seller's agreement.
Agreement for setting aside the goods can be given before or after the actual selection is made.
If a seller delivers the goods to a carrier for delivery without keeping any rights to control them, they have officially set them aside for the buyer.

Practical examples

1David orders 50 liters of cooking oil from Evelyn's warehouse. Evelyn fills 10 five-liter containers and puts David's name on them. Once David agrees to this selection, he becomes the owner of that oil.

2Farhan buys 100 bricks from a factory. The factory owner loads 100 bricks onto a truck hired by Farhan to take them to his house. As soon as the bricks are handed to the driver, Farhan becomes the owner.

FAQ

1. What are the requirements for property to pass under Section 23 of the Sale of Goods Act, 1930?

Under Section 23 of the Sale of Goods Act, 1930, property passes when goods of the right description and in a deliverable state are unconditionally appropriated to the contract with mutual assent.

2. Can assent be given after the goods are selected under Section 23 of the Sale of Goods Act, 1930?

Yes, Section 23 of the Sale of Goods Act, 1930, states that assent may be given either before or after the appropriation is made.

3. How does delivery to a carrier affect ownership under Section 23 of the Sale of Goods Act, 1930?

Under Section 23 of the Sale of Goods Act, 1930, delivery to a carrier for transmission to the buyer is deemed an unconditional appropriation if the seller does not reserve the right of disposal.

Test yourself

Q1.Under Section 23 of the Sale of Goods Act, 1930, what state must the goods be in for property to pass?

Q2.According to Section 23 of the Sale of Goods Act, 1930, whose assent is required for the appropriation of goods?

Q3.Under Section 23 of the Sale of Goods Act, 1930, what is the effect of delivering goods to a carrier without reserving the right of disposal?

Q4.Combined with Section 19, if a seller of unascertained goods delivers them to a carrier under Section 23, what determines if property passes?

22PreviousSection 22 Specific goods in a deliverable state, when the seller has to do anything thereto in order to ascertain price.24NextSection 24 Goods sent on approval or “on sale or return”.

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