Sale Of Goods Act MCQ Quiz - Objective Question with Answer for Sale Of Goods Act - Download Free PDF

The Correct answer is ​The right to stop the goods in transit in case of buyer's insolvency.

Key PointsSection 46 of the Sale of Goods Act delineates the rights of an unpaid seller even if the ownership of the goods has transferred to the buyer. Despite the transfer of property, the unpaid seller retains certain implied rights:

• Lien on Goods: The unpaid seller possesses a legal right to retain the goods in their possession until the buyer fulfills the payment obligation.
• Right of Stoppage in Transit: In the event of the buyer's insolvency, the unpaid seller can reclaim the goods during transit after relinquishing possession, protecting their interests.
• Right of Re-sale: The Act grants the unpaid seller the right to re-sell the goods under specific limitations.

The Correct answer is The buyer's title is equal to the seller's title.

Key Points

• Section 27 of the Sale of Goods Act establishes that when goods are sold by someone who is not the owner and lacks the owner's authority, the buyer's title to the goods is no better than that of the seller.
• The buyer acquires the same title as the seller, unless the owner's conduct precludes them from denying the seller's authority to sell.
• The provision also outlines specific conditions under which a sale made by a mercantile agent, with the owner's consent, is considered valid, provided the buyer acts in good faith and is unaware, at the time of the sale, that the seller lacks the authority to sell

The correct answer is ​Section 2(8)

Key Points As per Section 2(8) of Sale of Goods Act talks about  A person is considered "insolvent" if they have stopped paying their debts in the regular course of business or are unable to meet their financial obligations as they arise, regardless of whether they have formally committed an act of insolvency.

The correct answer is option3 

Key PointsSection 16 of the Sale of Goods Act outlines the implied conditions regarding the quality or fitness of goods in a contract of sale. These conditions are subject to the provisions of the Act and any other applicable laws. Generally, there is no implied warranty or condition regarding the quality or fitness for a specific purpose of goods, except in the following circumstances:

• If the buyer explicitly or implicitly informs the seller about the particular purpose for which the goods are needed, indicating reliance on the seller's skill or judgment, and the goods fall within the seller's usual business to supply, there is an implied condition that the goods should be reasonably fit for that purpose. However, this does not apply to goods sold under a patent or trade name.
• If goods are purchased by description from a seller who deals in goods of that description, an implied condition exists that the goods should be of merchantable quality. However, if the buyer has examined the goods, there is no implied condition regarding defects that should have been revealed during the examination.
• An implied warranty or condition regarding quality or fitness for a specific purpose may be established by the usage of trade.
• An express warranty or condition does not negate a warranty or condition implied by the Sale of Goods Act unless it is inconsistent with the Act.

The correect answer is Section 16T

Key Points

•  The principle of caveat emptor, or "buyer beware," is integrated into Indian law via the Sale of Goods Act, 1930.
• Section 16 of the Act emphasizes that when a product is sold under a contract, the law does not automatically assume that the seller provides an implied warranty of fitness and quality.
• Instead, the responsibility falls on the consumer to inspect the product, ensuring it meets their expectations and serves the intended purpose. In essence, the buyer is required to assess the product's quality before purchase.

The correct answer is The Doctrine of Caveat Emptor will apply.

Key Points

•  The doctrine of Caveat Emptor means “let the buyer beware.”
• The doctrine of caveat emptor is enshrined in Section 16 of the Sale of Goods Act, 1930.
• This doctrine of caveat emptor is based on the fundamental principle that once a buyer is satisfied with the product’s suitability, then he has no subsequent right to reject such a product. The objective of introducing this provision was to ensure that the buyer purchases the product at his own risk after being assured of the quality of the product. He is required to use his own skill and judgment except in cases of fraud where the doctrine of caveat emptor does not apply.

The correct answer is H. Anraj v. Government of Tamil Nadu, (AIR 1986 SC 63).

Key Points

• In the case of H. Anraj v. Government of Tamil Nadu, (AIR 1986 SC 63), it was held that in the light of the aforesaid discussion, the conclusions are that lottery tickets to the extent that they comprise the entitlement to participate in the draw are "goods" properly so called, squarely falling within the definition of that expression as given in the Tamil Nadu Act, 1959 and the Bengal Act, 1941, that to that extent they are not actionable claims and that in every sale thereof a transfer of property in the goods is involved. 

The correct answer is Concurrent condition.

Key Points

• Section 32 of the Sale of Goods Act, 1930, provides for Payment and delivery are concurrent conditions.
• It states that —Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods.

The correct answer is option 3.Key Points

• The doctrine of caveat emptor is based on the principle that the buyer should examine the product using his skill and judgment.
• If the buyer is satisfied with the condition and quality of the product and believes that the product would aptly fulfil his requirements, then he should purchase the product.
• Section 16 of Sale of Goods Act 193o deals with implied conditions as to quality or fitness.
• It states subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:
  • Section 16(1) of the said Act applies in situations where the seller is aware either expressly or by necessary implication of the purpose for which a buyer needs to purchase a specific product, and where the goods are of such description which the seller supply in his ordinary course of business.
    • But if, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose.
  • Section 16(2) of the Act incorporates the second exception to the doctrine of caveat emptor and states that when the goods are sold by description, the dealer is under an obligation to provide the goods of merchantable quality.
    • The proviso to S. 16(2) provides that “if upon examination of the goods to be purchased, the defects ought to have been revealed, then no implied condition as regards to the defect will exist.” 
  • An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.
  • An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith. 
• The first known case of caveat emptor is Chandelor v. Lupus (1603).

The correct answer is option 2.Key Points

• Section 12 of Sale of Goods Act 1930 deals with condition and warranty.
  • A stipulation in a contract of sale  with reference to goods which are the subject thereof may be a condition or a warranty.
  • A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.
  • A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.
  • Whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.

The correct option is Section 4.

Key Points

• SALE AND AGREEMENT TO SELL (SECTION 4):
  • According to section 4(1), "A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price".
• There may be a contract of sale between one part-owner and another.
• A contract of sale may be absolute or conditional. [Section 4(2)]
• Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. [Section 4(3)]
• An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. [Section 4(4)]

The correct option is Option 1.

Key Points

• Contract of sale:
  • This typically involves a transaction where one party agrees to transfer ownership of goods or services to another party in exchange for a certain price, usually monetary.
    • Agreement between Parties:
      • ​A, the owner of an old car valued at ₹80,000, agrees to transfer ownership of this car to B, a car dealer.
      • In return, B agrees to provide A with a new car.
    • Consideration:
      • ​Consideration refers to what each party gives or promises to give in exchange for the other party's promise.
      • In this case, A is offering their old car valued at ₹80,000, and B is promising to provide a new car.
      • Additionally, A agrees to pay the difference in cash, indicating further consideration.
    • Transfer of Ownership:
      • ​A has agreed to transfer ownership of the old car to B.
      • This transfer of ownership is a crucial aspect of a contract of sale, as it involves the passing of title from the seller (A) to the buyer (B).
    • Payment:
      • ​A agrees to pay the difference in cash, indicating that monetary consideration is also involved in the transaction.
    • Mutual Consent:
      • ​Both parties have mutually consented to the terms of the agreement.
      • A has agreed to deliver the old car and pay the price difference, while B has agreed to provide a new car in exchange.
  • Overall, these elements collectively constitute a contract of sale, where one party agrees to transfer ownership of goods to another party in exchange for consideration, typically in the form of money.

The correct answer is ​The state or condition of goods

Key Points Section 2(12) defines "quality of goods" as including their state or condition. This means that when referring to the quality of goods in legal terms, it encompasses not just their physical characteristics but also their overall state or condition. This could involve factors such as functionality, appearance, performance, or any other relevant aspect that contributes to the overall quality of the goods.

The Correct answer is ​The right to stop the goods in transit in case of buyer's insolvency.

Key PointsSection 46 of the Sale of Goods Act delineates the rights of an unpaid seller even if the ownership of the goods has transferred to the buyer. Despite the transfer of property, the unpaid seller retains certain implied rights:

• Lien on Goods: The unpaid seller possesses a legal right to retain the goods in their possession until the buyer fulfills the payment obligation.
• Right of Stoppage in Transit: In the event of the buyer's insolvency, the unpaid seller can reclaim the goods during transit after relinquishing possession, protecting their interests.
• Right of Re-sale: The Act grants the unpaid seller the right to re-sell the goods under specific limitations.

The Correct answer is The buyer's title is equal to the seller's title.

Key Points

• Section 27 of the Sale of Goods Act establishes that when goods are sold by someone who is not the owner and lacks the owner's authority, the buyer's title to the goods is no better than that of the seller.
• The buyer acquires the same title as the seller, unless the owner's conduct precludes them from denying the seller's authority to sell.
• The provision also outlines specific conditions under which a sale made by a mercantile agent, with the owner's consent, is considered valid, provided the buyer acts in good faith and is unaware, at the time of the sale, that the seller lacks the authority to sell