Section 29 of The Sale of Goods Act, 1930
When the seller of goods has obtained possession thereof under a contract voidable under section 19 or section 19A of the Indian Contract Act, 1872 (9 of 1872), but the contract has not been rescinded at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of the seller’s defect of title.
Summary
- This part of the 1930 law protects buyers who purchase items from a seller who got them through a contract that could be cancelled.
- If the seller's original contract was voidable due to things like fraud or pressure, but it hasn't been officially cancelled yet, the seller can still sell the goods.
- A person who buys these goods gets a valid and good title to them.
- To get this valid title, the new buyer must act in good faith, meaning they are being honest in the transaction.
- The buyer must also have no knowledge or notice that there was anything wrong with the seller's right to the goods.
Practical examples
FAQ
1. What is a voidable contract under Section 29 of the Sale of Goods Act, 1930?
Under Section 29 of the Sale of Goods Act, 1930, a voidable contract is one that could be cancelled under section 19 or 19A of the Indian Contract Act, 1872, usually due to lack of free consent.
2. Does a buyer get good title if the seller's contract has already been rescinded under Section 29 of the Sale of Goods Act, 1930?
No, under Section 29 of the Sale of Goods Act, 1930, the buyer only acquires good title if the contract has not been rescinded at the time of the sale.
3. What are the two main requirements for a buyer to benefit from Section 29 of the Sale of Goods Act, 1930?
Under Section 29 of the Sale of Goods Act, 1930, the buyer must buy the goods in good faith and without notice of the seller's defect of title.
Test yourself
Q1.Under Section 29 of the Sale of Goods Act, 1930, the seller must have obtained possession under a contract voidable under which Act?
Q2.According to Section 29 of the Sale of Goods Act, 1930, when must the contract NOT have been rescinded for the buyer to get title?
Q3.Under Section 29 of the Sale of Goods Act, 1930, what does "without notice" mean for the buyer?
Q4.If a buyer fulfills the conditions of Section 29 of the Sale of Goods Act, 1930, what kind of title do they get?