Sale of Goods Act MCQs for Judiciary, Page 9

Correct answer: A. Reject the goods, or accept them and pay at the contract rate for the quantity delivered

Section 37 gives the buyer a choice in case of short delivery. The buyer need not accept a deficient quantity, but may do so and pay proportionately at the contract rate. The law therefore protects both contractual expectation and practical commercial adjustment.

Source note: Sale of Goods Act, 1930, Section 37(1)

Correct answer: A. Reject the whole, accept only the contracted quantity, or accept the whole and pay at the contract rate

Section 37 offers a flexible remedy. The buyer can reject all, take only what was contracted, or accept the whole and pay proportionately. This recognises that excess quantity may or may not suit the buyer's business needs.

Source note: Sale of Goods Act, 1930, Section 37(2)

Correct answer: C. Reject the whole if separation is not possible, or accept only the contract goods if they can be separated and reject the rest

The remedy depends on whether separation is possible. If the goods can be separated, the buyer may keep the contract goods and reject the rest. If not, rejection of the whole may be justified. Section 37 therefore gives a practical and context-based solution.

Source note: Sale of Goods Act, 1930, Section 37(3)

Correct answer: A. The whole price has not been paid or tendered

Section 45 covers the ordinary case of non-payment or non-tender of the whole price. It also includes situations where a negotiable instrument was taken conditionally but later dishonoured. The focus is on the seller not actually receiving the price promised under the sale.

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

Correct answer: C. Is dishonoured

Conditional payment means actual payment is subject to the instrument being honoured. If the bill or cheque is dishonoured, the seller is treated as still unpaid and may use the statutory rights given to an unpaid seller.

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

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

These are the classic proprietary or quasi-proprietary protections. Lien lets the unpaid seller retain goods, stoppage in transit allows recovery while goods are moving, and resale permits disposal in defined situations. Together they protect the unpaid seller from buyer default.

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

Correct answer: A. Suit for price and damages

The Act distinguishes rights against goods from personal remedies against the buyer. If the legal conditions are satisfied, the seller may sue for the price, damages for non-acceptance, interest, and in proper cases seek other relief recognised by law.

Source note: Sale of Goods Act, 1930, Sections 55-61

Correct answer: B. Retain possession of goods until payment or tender of the price

Lien is essentially a right of retention. So long as the seller remains in possession and the statutory conditions are satisfied, the seller may keep the goods until the price is paid or tendered. It is possession-based and therefore lost once possession is surrendered.

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

Correct answer: A. The buyer has become insolvent

Buyer insolvency is one of the three clear grounds named by the statute. It justifies retention even if credit had originally been allowed. The law recognises that the seller should not be forced to part with goods when the buyer's financial collapse threatens payment.

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

Correct answer: B. Intention to abandon possession of the whole

Part delivery does not automatically destroy lien over the balance. The key question is whether the seller intended, by that delivery, to give up possession and control over the whole lot. If such intention is absent, lien on the remainder survives.

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

Correct answer: B. Reserving the right of disposal

Once the seller parts with possession to an independent carrier for the buyer, lien generally ends because lien depends on possession. The important exception is where the seller reserves the right of disposal, thereby retaining control despite shipment.

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

Correct answer: A. Resume possession of goods while they are in transit after buyer insolvency

Stoppage in transit is a powerful remedy available after possession has already been handed over, but before the goods reach the buyer. It exists because insolvency discovered after dispatch would otherwise leave the seller exposed without any practical protection.

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

Correct answer: B. Cannot pay debts as they become due

The definition is functional and commercial. The question is whether the person can meet ordinary liabilities in the usual course. Formal bankruptcy language is not necessary in every case; practical inability to pay is enough.

Source note: Sale of Goods Act, 1930, Section 2(8)

Correct answer: B. The buyer or buyer's agent obtains delivery from the carrier

Transit is a legal state tied to carriage and possession, not simply passage of time. Once the buyer or an authorised agent obtains delivery, transit ends and stoppage in transit can no longer be exercised.

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

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

Section 52 recognises practical commercial realities. The seller may not physically intercept the goods, so notice to the carrier is enough if timely and effective. Once such notice is properly received, the carrier must redeliver according to the seller's directions.

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

Correct answer: A. The seller has assented to it or a document of title has been lawfully transferred to a good-faith transferee

Section 53 seeks to balance seller protection with commercial reliance on documents of title. Mere private sub-sales by the buyer do not automatically defeat the seller's rights. But where the seller has assented, or documents reach a bona fide transferee, the position changes.

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

Correct answer: A. Perishable

Perishable goods cannot wait for prolonged dispute because delay itself destroys value. So the Act allows resale without the same formal delay expected in ordinary goods. This is a practical exception meant to reduce waste and commercial loss.

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

Correct answer: A. Recover damages from the original buyer where lawful

The notice requirement gives the buyer a final opportunity to perform and avoid resale. If the buyer still defaults, the seller may resell and preserve the appropriate claim for resulting loss. The law thus combines fairness with commercial practicality.

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

Correct answer: A. Accept and pay according to the contract

A suit for price is different from damages. It is available where the legal debt of the price has matured under the contract, usually because ownership has already passed or price is payable on a fixed day irrespective of delivery. The seller then sues for the price itself.

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

Correct answer: A. Delivery

Section 55 also recognises contracts where payment is fixed independently of delivery or passing of property. In such cases, once the day certain arrives and the buyer defaults, the seller may sue for the price because the payment obligation has ripened as a contractual debt.

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

Correct answer: B. Damages for non-acceptance

Where the conditions for suit for price are not met, the seller is not remediless. Section 56 allows a claim for damages caused by the buyer's refusal to accept and pay. The amount is assessed by ordinary contractual principles, including market difference where relevant.

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

Correct answer: B. Subject to the principles governing specific relief

Specific performance is not automatic. It is an equitable remedy granted where damages are inadequate and the goods are sufficiently identified. Section 58 recognises this possibility, but the court still acts under established principles of specific relief and discretion.

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

Correct answer: B. Set up the breach in diminution or extinction of the price, or sue for damages

Section 59 reflects the collateral nature of a warranty. The buyer usually keeps the goods but gets monetary adjustment, either by reducing the price payable or by filing a claim for damages. Rejection is not the normal consequence of mere warranty breach.

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

Correct answer: A. Damages for non-delivery

Section 57 gives the buyer a direct remedy for non-delivery. If the seller defaults without lawful excuse, the buyer can claim damages measured by ordinary contract principles, often including market difference and foreseeable loss where legally allowed.

Source note: Sale of Goods Act, 1930, Section 57

Correct answer: B. Any other customary manner

Section 64 recognises the commercial reality of auctions. The auctioneer's accepted mode of signalling completion determines the moment of sale. Until that moment, bidders may usually withdraw their bids unless the governing conditions provide otherwise within the law.

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