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Sale of Goods Act MCQs for Judiciary, Page 6

Judiciary Sale of Goods Act questions 123-146 of 220, with answer keys and explanations covering conditions, warranties, transfer of property, delivery, unpaid seller rights, auction sales, and buyer remedies.

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  • Acceptance1
  • Acceptance and Rejection4
  • Approval and Return2
  • Auction Sale2
  • Buyer and Seller Remedies6
  • Buyer’s Remedies2
  • Carrier and Examination4
  • Caveat Emptor4
  • Condition Treated as Warranty4
  • Conditions and Warranties22
  • Delivery to Carrier2
  • Fitness and Quality4
  • Formation of Contract of Sale4
  • Goods and Classification4
  • Implied Terms7
  • Nature and Scope10
  • Passing of Property4
  • Performance and Delivery20
  • Preliminary and Scope4
  • Price and Valuation4
  • Quantity and Instalments4
  • Remedies and Auction1
  • Reservation of Disposal2
  • Rules for Specific Goods4
  • Sale and Agreement to Sell4
  • Sale by Description and Sample4
  • Seller or Buyer in Possession4
  • Seller’s Remedies3
  • Stoppage and Resale3
  • Title of Buyer6
  • Title to Goods6
  • Transactions Similar to Sale4
  • Transfer of Property18
  • Transfer of Risk2
  • Transfer of Title8
  • Unascertained Goods4
  • Unpaid Seller29
Question 123HardDelivery to Carrier

If the seller sends goods by a route involving sea transit and fails to give the buyer notice enabling insurance to be arranged, the goods are deemed to be at risk during transit as between buyer and seller at the seller's risk if:

  1. A

    The buyer is a minor

  2. B

    Such notice ought to have been given

  3. C

    The contract price is uncertain

  4. D

    The goods are specific

View answer and explanation

Correct answer: B. Such notice ought to have been given

Section 39(3) addresses shipping risks. If the seller should have notified the buyer so that insurance could be arranged and fails to do so, the seller may remain responsible for the transit risk as between the parties.

Source note: Sale of Goods Act, 1930, Section 39(3)

Question 124MediumAcceptance

The buyer is deemed to have accepted goods when he does an act in relation to them which is inconsistent with the ownership of the seller, such as:

  1. A

    Examining the goods reasonably

  2. B

    Keeping them safely pending inspection

  3. C

    Reselling them as owner

  4. D

    Asking for an invoice

View answer and explanation

Correct answer: C. Reselling them as owner

Section 42 says acceptance can be inferred from conduct inconsistent with the seller's ownership. Reselling the goods as one's own is a classic example. Mere examination or asking for documents does not ordinarily amount to acceptance.

Source note: Sale of Goods Act, 1930, Section 42

Question 125MediumUnpaid Seller

A seller is an unpaid seller when the whole of the price has not been paid or tendered, or when:

  1. A

    The goods are damaged after sale

  2. B

    A bill of exchange or other negotiable instrument has been received as conditional payment and the condition has not been fulfilled by reason of dishonour

  3. C

    The buyer is unknown

  4. D

    The contract is oral

View answer and explanation

Correct answer: B. A bill of exchange or other negotiable instrument has been received as conditional payment and the condition has not been fulfilled by reason of dishonour

Section 45 includes not just unpaid cash price situations but also conditional payment through instruments like cheques or bills. If the instrument is dishonoured, the seller is restored to the status of unpaid seller.

Source note: Sale of Goods Act, 1930, Section 45

Question 126EasyUnpaid Seller

The unpaid seller's rights against the goods include:

  1. A

    Lien, stoppage in transit, and resale in proper cases

  2. B

    Only criminal prosecution

  3. C

    Automatic recovery of all buyer assets

  4. D

    Attachment before judgment in every case

View answer and explanation

Correct answer: A. Lien, stoppage in transit, and resale in proper cases

Section 46 classifies the unpaid seller's rights into rights against goods and rights against the buyer personally. Against the goods, the main protections are lien, stoppage in transit, and resale in appropriate circumstances.

Source note: Sale of Goods Act, 1930, Section 46

Question 127MediumUnpaid Seller

An unpaid seller in possession may retain the goods where the goods have been sold without any stipulation as to credit, or where the term of credit has expired, or where:

  1. A

    The buyer is insolvent

  2. B

    The goods are future goods

  3. C

    The contract is for sample only

  4. D

    The buyer has inspected the goods

View answer and explanation

Correct answer: A. The buyer is insolvent

Section 47 grants lien in three key situations: no credit, expired credit, and buyer insolvency. Insolvency is especially important because it allows the seller to hold goods even if the credit period might otherwise not have expired.

Source note: Sale of Goods Act, 1930, Section 47

Question 128MediumUnpaid Seller

Where an unpaid seller has made part delivery, he may still exercise lien on the remainder unless the part delivery was made under circumstances showing an agreement to:

  1. A

    Waive the lien

  2. B

    File a civil suit

  3. C

    Increase the price

  4. D

    Insure the goods

View answer and explanation

Correct answer: A. Waive the lien

Section 48 protects the seller's security even after part delivery, unless the facts show that the seller intended to surrender the lien over the balance. The question is one of intention inferred from the transaction.

Source note: Sale of Goods Act, 1930, Section 48

Question 129MediumUnpaid Seller

The unpaid seller loses his lien when he delivers the goods to a carrier without reserving the right of disposal, or when the buyer lawfully obtains possession, or when:

  1. A

    The market price rises

  2. B

    The seller waives the lien

  3. C

    The contract is oral

  4. D

    The goods are specific

View answer and explanation

Correct answer: B. The seller waives the lien

Section 49 lists the ways in which lien is lost. Waiver is one of them. Lien depends on possession and intention to retain security. Once possession is surrendered without reservation or the lien is waived, that right is gone.

Source note: Sale of Goods Act, 1930, Section 49

Question 130MediumUnpaid Seller

The right of stoppage in transit becomes available when the buyer becomes insolvent and the goods are:

  1. A

    Still with the seller

  2. B

    In the course of transit

  3. C

    Already consumed by the buyer

  4. D

    Destroyed before contract

View answer and explanation

Correct answer: B. In the course of transit

Stoppage in transit is a middle-stage protection. Lien applies while the seller still has possession. Once the goods are with a carrier and transit continues, lien is gone but stoppage in transit arises if the buyer becomes insolvent.

Source note: Sale of Goods Act, 1930, Section 50

Question 131HardUnpaid Seller

Transit is not at an end merely because the goods have reached the destination if:

  1. A

    The carrier still holds them on behalf of the carrier and not yet as agent of the buyer

  2. B

    The buyer has become insolvent

  3. C

    The goods are future goods

  4. D

    The price remains unascertained

View answer and explanation

Correct answer: A. The carrier still holds them on behalf of the carrier and not yet as agent of the buyer

Section 51 examines the legal character of possession, not just physical arrival. Transit ends only when the carrier acknowledges holding the goods on behalf of the buyer. If that attornment has not happened, stoppage may still be possible.

Source note: Sale of Goods Act, 1930, Section 51

Question 132MediumUnpaid Seller

The unpaid seller may exercise stoppage in transit either by taking actual possession or by:

  1. A

    Sending police notice only

  2. B

    Giving notice of his claim to the carrier or other bailee in possession

  3. C

    Publishing a newspaper advertisement

  4. D

    Filing a suit before delivery every time

View answer and explanation

Correct answer: B. Giving notice of his claim to the carrier or other bailee in possession

Section 52 allows stoppage through notice to the carrier or bailee. Once proper notice reaches the person in possession in time to prevent delivery, the carrier must redeliver or hold the goods according to the seller's directions, subject to expenses.

Source note: Sale of Goods Act, 1930, Section 52

Question 133HardUnpaid Seller

The unpaid seller's right of lien or stoppage is generally not affected by a sub-sale by the buyer, unless:

  1. A

    The contract price is low

  2. B

    The seller has assented to it, or a document of title has been transferred to a person taking in good faith and for consideration

  3. C

    The sub-buyer is a relative of the buyer

  4. D

    The goods are delivered in parts

View answer and explanation

Correct answer: B. The seller has assented to it, or a document of title has been transferred to a person taking in good faith and for consideration

Section 53 preserves the unpaid seller's rights despite the buyer's sub-sale, but creates important commercial exceptions. If the seller assents, or a document of title reaches a good-faith transferee for value, the balance shifts toward protecting that third party.

Source note: Sale of Goods Act, 1930, Section 53

Question 134MediumUnpaid Seller

If the unpaid seller rightfully resells perishable goods, he may ordinarily recover from the original buyer:

  1. A

    Nothing at all

  2. B

    Damages for any loss caused by the buyer's breach

  3. C

    Only nominal compensation

  4. D

    Criminal fine

View answer and explanation

Correct answer: B. Damages for any loss caused by the buyer's breach

Section 54 recognises resale as a practical commercial remedy. After a proper resale, the seller can claim the loss caused by the buyer's default. In some cases, a profit may belong to the seller, and the original buyer may lose any claim to the goods.

Source note: Sale of Goods Act, 1930, Section 54

Question 135EasySeller's Remedies

A seller may sue for the price where property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay according to the contract. Which section governs this remedy?

  1. A

    Section 55

  2. B

    Section 56

  3. C

    Section 57

  4. D

    Section 59

View answer and explanation

Correct answer: A. Section 55

Section 55 is the seller's action for price. This remedy differs from damages for non-acceptance, because it proceeds on the footing that the price itself has become due in law under the contract.

Source note: Sale of Goods Act, 1930, Section 55

Question 136HardSeller's Remedies

Even if property in goods has not passed, the seller may sue for price when the price is payable on a day certain irrespective of delivery and the buyer wrongfully refuses to pay. This is a rule under:

  1. A

    Section 55(2)

  2. B

    Section 57

  3. C

    Section 61 only

  4. D

    Section 64

View answer and explanation

Correct answer: A. Section 55(2)

Section 55(2) is an important special rule. It allows an action for price even before ownership passes if the contract makes the price payable on a fixed day irrespective of delivery. In such a case, the contractual promise to pay has matured independently.

Source note: Sale of Goods Act, 1930, Section 55(2)

Question 137EasySeller's Remedies

When the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue for:

  1. A

    Damages for non-acceptance

  2. B

    Only specific performance

  3. C

    Automatic confiscation of buyer property

  4. D

    Interest only

View answer and explanation

Correct answer: A. Damages for non-acceptance

Section 56 gives the seller a contractual damages action when the buyer refuses acceptance. This remedy is distinct from an action for price and is usually measured by the difference between contract price and market price, subject to ordinary principles.

Source note: Sale of Goods Act, 1930, Section 56

Question 138MediumBuyer's Remedies

The court may direct specific performance in a contract for specific or ascertained goods when damages are not an adequate remedy. This power is recognised in:

  1. A

    Section 58

  2. B

    Section 59

  3. C

    Section 60

  4. D

    Section 64

View answer and explanation

Correct answer: A. Section 58

Section 58 allows the court to order specific performance for specific or ascertained goods. This is especially useful where the goods are unique or market substitute is not readily available. The relief remains discretionary and consistent with equitable principles.

Source note: Sale of Goods Act, 1930, Section 58

Question 139MediumBuyer's Remedies

A buyer alleging breach of warranty may set up the breach in diminution or extinction of the price, or may:

  1. A

    Reject the goods in every case

  2. B

    Sue the seller for damages for breach of warranty

  3. C

    Resell the goods without notice and recover double loss

  4. D

    Confiscate seller goods

View answer and explanation

Correct answer: B. Sue the seller for damages for breach of warranty

Section 59 provides two main responses to breach of warranty: use it as a defence to reduce or extinguish price, or bring an independent action for damages. It does not automatically restore the broader rejection rights available for breach of condition.

Source note: Sale of Goods Act, 1930, Section 59

Question 140MediumAuction Sale

Where a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it is not lawful for the seller to bid himself or employ any person to bid at the sale. If this rule is violated, the sale may be treated by the buyer as:

  1. A

    Valid in all circumstances

  2. B

    Fraudulent and voidable

  3. C

    Automatically criminal

  4. D

    A mortgage

View answer and explanation

Correct answer: B. Fraudulent and voidable

Section 64 protects fairness in auction sales. Undisclosed bidding by or on behalf of the seller amounts to a deceptive practice. The buyer may treat the sale as fraudulent and avoid it.

Source note: Sale of Goods Act, 1930, Section 64

Question 141EasyNature and Scope

Under Section 4 of the Sale of Goods Act, a contract of sale is a contract whereby:

  1. A

    The seller agrees to manufacture goods for the buyer

  2. B

    The seller transfers or agrees to transfer the property in goods to the buyer for a price

  3. C

    The bailee undertakes to return goods after use

  4. D

    The buyer pays advance money for future negotiations

View answer and explanation

Correct answer: B. The seller transfers or agrees to transfer the property in goods to the buyer for a price

Section 4 gives the core definition. The contract must involve transfer or agreement to transfer the property in goods, and that transfer must be for a price. If ownership is not intended to pass, the transaction may be bailment, hire, or some other arrangement, but not a sale.

Source note: Sale of Goods Act, 1930, Section 4

Question 142EasyNature and Scope

A contract of sale becomes a sale when:

  1. A

    The price is fixed by the parties

  2. B

    The contract is written and registered

  3. C

    The property in goods passes from seller to buyer immediately

  4. D

    The buyer takes delivery of the goods

View answer and explanation

Correct answer: C. The property in goods passes from seller to buyer immediately

The distinction turns on transfer of ownership, not merely on payment or delivery. When property passes at once, the contract is a sale. If transfer is to happen later or on fulfilment of a condition, it remains an agreement to sell until that point.

Source note: Sale of Goods Act, 1930, Section 4

Question 143EasyNature and Scope

A contract is an agreement to sell when:

  1. A

    Ownership has already passed but price is unpaid

  2. B

    Ownership is to pass at a future time or subject to some condition later to be fulfilled

  3. C

    The goods are movable and specific

  4. D

    The seller has delivered possession but retained no rights

View answer and explanation

Correct answer: B. Ownership is to pass at a future time or subject to some condition later to be fulfilled

An agreement to sell is an executory contract. The parties intend that ownership will pass later, either after time passes or after a condition is fulfilled. Until then, only a contractual right exists, not a completed transfer of ownership.

Source note: Sale of Goods Act, 1930, Section 4

Question 144EasyNature and Scope

In a hire purchase transaction, the hirer generally obtains:

  1. A

    Immediate ownership in goods

  2. B

    Only possession with an option to purchase after fulfilling the terms

  3. C

    A mortgage interest in goods

  4. D

    A statutory lien over goods

View answer and explanation

Correct answer: B. Only possession with an option to purchase after fulfilling the terms

In hire purchase, possession is given first, but ownership does not pass immediately. The hirer usually gets an option to become owner after payment of instalments and satisfaction of the contract terms. This is why hire purchase is different from an outright sale.

Source note: Standard distinction between sale and hire purchase

Question 145EasyNature and Scope

Which feature primarily distinguishes a sale from a bailment?

  1. A

    Delivery of movable goods

  2. B

    Presence of consideration

  3. C

    Transfer of general property in goods

  4. D

    Existence of a written document

View answer and explanation

Correct answer: C. Transfer of general property in goods

In bailment, possession passes for some purpose, but ownership remains with the bailor. In a sale, general property in goods passes to the buyer. Delivery may happen in both, so delivery alone is not the true test.

Source note: Sale of Goods Act, 1930 / Bailment principles

Question 146EasyNature and Scope

Under the Sale of Goods Act, the term "goods" primarily refers to:

  1. A

    Only tangible goods presently in existence

  2. B

    Every kind of movable property other than actionable claims and money

  3. C

    Only specific goods identified at the time of contract

  4. D

    Only goods used in trade or commerce

View answer and explanation

Correct answer: B. Every kind of movable property other than actionable claims and money

Section 2(7) uses a wide definition and includes stock, shares, growing crops, grass, and things attached to land that are agreed to be severed before sale. Money and actionable claims are excluded. So the concept is broader than merely physical goods lying in a shop.

Source note: Sale of Goods Act, 1930, Section 2(7)

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