Section 24 of The Sale of Goods Act, 1930
When goods are delivered to the buyer on approval or "on sale or return" or other similar terms, the property therein passes to the buyer
- (a)when he signifies his approval or acceptance to the seller or does any other act adopting the transaction;
- (b)if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time.
Summary
- This section of the 1930 Act applies when goods are delivered to a buyer on trial or with the option to return them.
- Ownership passes to the buyer if they tell the seller they accept the goods or if they do something to show they are keeping them.
- If the buyer does any act that treats the goods as their own property, the transaction is considered adopted and ownership passes.
- If the buyer keeps the goods without saying anything, ownership passes when the time set for returning them runs out.
- If no return time was agreed upon, ownership passes after a reasonable amount of time has passed.
Practical examples
FAQ
1. When does property pass for goods on approval under Section 24 of the Sale of Goods Act, 1930?
Under Section 24 of the Sale of Goods Act, 1930, property passes when the buyer signifies approval, does an act adopting the transaction, or retains the goods beyond the fixed or reasonable time.
2. What counts as an act adopting the transaction under Section 24 of the Sale of Goods Act, 1930?
Under Section 24 of the Sale of Goods Act, 1930, any act by the buyer that is inconsistent with the seller's ownership, such as selling or pledging the goods, would be adopting the transaction.
3. How long can a buyer keep goods on approval before they become the owner under Section 24 of the Sale of Goods Act, 1930?
Under Section 24 of the Sale of Goods Act, 1930, if no time is fixed, ownership passes once a reasonable time has expired without notice of rejection.
Test yourself
Q1.Under Section 24 of the Sale of Goods Act, 1930, if a time is fixed for the return of goods, when does property pass if the buyer is silent?
Q2.According to Section 24 of the Sale of Goods Act, 1930, what is the result if no time is fixed for returning goods sent on approval?
Q3.Under Section 24 of the Sale of Goods Act, 1930, property passes when the buyer signifies approval or:
Q4.Comparing Section 23 and 24 of the Sale of Goods Act, 1930, how does the passing of property differ?