In this CLAT preparation series, we publish detailed answers to old CLAT exam questions well supported with statutory provisions, supporting judgments and easy illustrations.
Legal Aptitude: The section contains 50 questions. Each question contains legal principles based on statutory enactments and facts related to the same. These propositions may not be the true ones. The student has to presume that it is true for reaching the conclusion to the given problem. Four answer choices are given in each question from which the student has to select the most appropriate and reasonable conclusion based on the given principle. The section is aimed to test one’s ability in legal aptitude, awareness of the law, research aptitude and problem-solving ability. It may be noted that the most reasonable conclusion may be absurd or unacceptable for any reason, yet the student must adhere to the principle given to arrive at the same in the question.
Question 116 Principle: Property consists of the right to possess, right to use, right to alienate and right to exclude others. The sale is complete when the property gets transferred from the seller to the buyer.
Facts: A sold his car to B. B requested A to keep the car in his care on behalf B for one month. A agreed.
(A) Sale of car is complete.
(B) Sale of car is not complete.
(C) Sale will be completed when B keeps the car in his own care.
(D) Sale will be automatically completed after the expiry of one month.
Property is in the form of movable property, immovable property, intellectual property etc. The fact in the question refers to a movable property ie a car. In the above principle, the legal nature of a right is stated. If you own a property, you are supposed to have the right to choose what to be done with it in a legal manner. You are the only one who can alienate it as you hold the title. You are the one to exclude others in using, possessing the same as you hold the title as the owner.
We may now check the answer choices:
Option A: Sale of car is complete
In India, the sale of movable property is governed by Sale of Goods Act, 1930 (in short, “SGA”). As per the SGA, it is the duty of the seller to deliver the goods to the buyer, and the buyer to pay the seller for the goods delivered.[Section 31]. However, it is stated that the delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf.[Section 33]. While stating how to effect delivery, SGA clarifies that the delivery can be made to any person who is authorized to hold them on behalf of the buyer. In effect, there is nothing to show that the buyer should not be such an authorised person.
Again in Rules as to delivery stated in Section 36, the SGA notes whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. So it is clear that the parties can make a specific clause as to the delivery of the sold goods. The seller can hold the goods if specified so by the buyer.
Here, A sold his car to B and A agreed B that he will keep the car for one month of behalf of A. Thus it is very clear that A is holding it on behalf of B. Hence, our answer choice should be A: Sale of car is complete.
Option B: Sale of car is not complete.
Delivery is an essential condition to complete the sale. Here, it is told that A sold his car. But it should be delivered to B to complete the transaction. From the principle, it is clear that sale is complete when the property gets transferred. As stated above, parties can make separate rules as to the delivery of goods. Here, as A is holding the car on behalf of B on his request, it can be said that B, as the buyer, has the right to choose what to do with the car. He told A to hold it for one month and A agreed. So the sale is complete. Hence, this answer choice is wrong.
Option C: Sale will be completed when B keeps the car in his own care.
As per SGA, the primary rule is that the buyer has to get the goods from the seller and pay the price. However, the title as the owner can be changed and the parties can choose the delivery mode and options. Since ‘A’ holds the car as directed by the new owner B, this should not be our answer choice.
Option D: Sale will be automatically completed after the expiry of one month.
This is a tricky answer choice. Please note that the rules for noted above states “delivery of goods sold may be made by doing anything which the parties agree”. We must have attention to the words “delivery of goods sold”, which means that delivery happens anytime after the sale. This may not be immediate or concurrent with the sale agreement. In the above fact B, the buyer requested A to hold the car for one month. B can ask thus if he is the owner of the car and A needs to agree to the same if he got the price for the car from B. Hence it is understood that the sale has occurred. Now only the process of delivery is remaining. As noted above in the statutory provisions, delivery can be as per the specific agreements of the parties involved in the sale and any person can hold the property on behalf of the buyer. Hence, it is incorrect to say that the sale will be completed after the expiry of one month. The sale is already completed.
A doubt may arise in our mind when the principle says that sale is complete when the property gets transferred from the seller to the buyer. Here the car is not delivered yet to the buyer. But please note that the law involved here is the Sale of Goods Act which deals with movable properties. Car is movable property and is “a good” for sale. Section 4 of the SGA states about the sale agreement/contract of sale. Section 4(1) states that “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.” Please note the two identical yet different words in the above provision viz. “property” and “goods”. The seller is agreeing to transfer the property in goods to the buyer. If we peruse the terms “Property in goods”, we can necessarily infer car as the “goods”. Now the term “property” means every proprietary right over the goods. Thus property in goods(car) means proprietary rights(ownership etc) in the car.
In this notion, the principle means that sale is complete when ownership etc. in the car is transferred from seller to buyer. So, the sale is completed in the above fact as ownership is transferred. Hence, this answer is incorrect.
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