CA Foundation

This Performance of a Contract – CA Foundation Law Study Material is designed strictly as per the latest syllabus and exam pattern.

Performance of a Contract – CA Foundation Business Law Study Material

Question 1.
What is meant by tender of performance? What are the essentials of valid tender of performance? What is the effect of refusal by the promisee to accept a valid tender of performance in respect of goods and money?
Answer:
Attempted Performance or Tender / When the promisor offers to perform his obligation under the contract but is unable to do so because the promisee does not accept the performance, it is called “attempted performance” or “tender”. Thus, “tender” is not actual performance but is only an “offer to perform” the obligation under the contract. A valid tender of performance is equivalent to performance.

ESSENTIALS OF A VALID TENDER:
A valid tender or offer of performance must fulfil the following conditions: (Sec. 38)

1. It must be unconditional (a tender is conditional where it is not in accordance with the term of the contract)
2. It must be made at the proper time and place.
3. It must be of the whole obligation contracted for and not only of the part.
4. If the offer/tender relates to the delivery of goods, it must give a reasonable opportunity to the promisee for inspection of goods so that he may be sure that the goods tendered are of contract description.
5. It must be made by a person who is in a position and is willing to perform the promise.
6. It must be made to the proper person ie.t the promisee or his duly authorised agent. A tender made to a stranger is invalid.
7. If there are several joint promises, an offer to any one of them is a valid tender.
8. In the case of tender of money, the exact amount should be tendered in the legal tender money.

Effect of refusal to accept a properly made offer of performance or tender (Sec. 38) :
Where the promisor has made an offer of performance to the promisee, and the offer has not been accepted, then, according to Sec.38, the promisor’s obligations under the contract come to an end but his rights continue. He need not perform his part of the contract but may initiate action against the promisee for breach of contract.

Exception: If a debtor has properly offered to pay money, and the creditor refuses to accept payment, the debtor’s liability to pay shall not come to an end. However, he will not be liable to pay interest on the due amount, from the date of rejection of the tender.

Question 2.
When is the time deemed to be of the essence of a contract in the performance of a contract? What are the consequences when the party fails to perform the contract within the time stipulated in the contract?
Answer:
The phrase “ time as the essence of the contract” means that Perl romance within time is the most vital condition of the contract. If time is the essence of the contract then the other party can avoid the contract and if it is not, the other party cannot avoid the contract.

When is the time the essence of the contract?
1. Whether time is of the essence of the contract, depends upon

• The intention of the parties
• Nature of the transaction
• The terms of the contract re. if the parties to the contract have expressly agreed that performance within a limited time was necessary;

2. It is well settled that unless a different intention appears from the terms of the contract, ordinarily in commercial contracts the time of delivery of goods is of the essence of the contract but not the time of payment of the price;

3. In contracts for the purchase of land, usually time is not of the essence of the contract because land values do not frequently fluctuate.

Effects of failure to perform a contract within the stipulated time. Sec. 55 deals with the subject and lays down the following rules:

1. Where “time is of the essence of the contract” and there is failure to perform within the fixed time, the contract (or so much of it as remains unperformed) becomes voidable at the option of the promisee. He may rescind the contract and sue for the breach.

2. Where “time is not of the essence of the contract”, failure to perform within the specified time does not make the contract voidable. It means that in such a case the promisee cannot rescind the contract and he will have to accept the delayed performance. But he would be entitled to claim compensation from the promisor for any loss caused to him by the delay. This rule is, however, subject to the condition that the promisor should not delay the performance beyond a reasonable time, otherwise the contract will become voidable at the option of the promisee.

3. In case of a contract voidable on account of the promisor’s failure to perform his promise within the agreed time or within a reasonable time, as the case may be, and if the promisee, instead of rescinding the contract, accept the delayed performance, he cannot afterwards claim compensation for any loss caused by the delay, unless, at the time of accepting the delayed performance, he gives notice to the promisor of his intention to do so.

Question 3.
What is meant by the appropriation of payments? What are the rules for appropriation of payments to the debts owed by the debtor?
Answer:
When a debtor owes multiple distinct debts to a creditor and makes a payment that is insufficient to discharge all the debts, then the manner in which the payment has to be applied to discharge a particular debt amounts to appropriation of payments. Sections 59-61 of the Indian Contract Act, 1872, lays down the rules regarding the appropriation of payments which are as follows:

1. Appropriation as per the express instruction of the debtor: If the debtor, owing to multiple debts to the same creditor, at the time of making the payment, gives express instructions as to the appropriation of payment, then the payment must be appropriated towards the discharge of the particular debt as instructed by the debtor.

2. Appropriation as per implied circumstances: Sometimes a debtor owing multiple debts makes a payment to the creditor which is insuffi¬cient to discharge all his debts, without any express instruction as to the appropriation of the payment. In such a case, the appropriation must be done towards the debt, which the debtor intended to do so under the implying circumstances.

3. Appropriation of payment where there is no express instruction, nor implying circumstances: When neither the debtor sends the pay¬ment with any express instructions, nor do the circumstances imply as to which debt the debtor intends the payment to be applied, then the appropriation may be done by the creditor at his own discretion. The creditor may apply the payment towards the discharge of any lawful debt, as per his discretion and intimate the same to the debtor. Once the manner of appropriation is communicated by the creditor to the debtor, the same shall not be changed.

Further, the creditor can even appropriate the payment to a time-barred debt or to the interest due to him and then to the principal sum. However, no appropriation must be made by the creditor to an unlawful or disputed debt.

4. Appropriation in chronological order: Where the debtor does not give any express instructions as to the appropriation of payments, nor the creditor appropriates the payments as per his discretion, then the payment must be appropriated to discharge the debts due in order of time. When the debts are of equal standing (ie. of the same due date), the payments shall be appropriated in the discharge of each such debt proportionately.

Question 4.
Discuss and explain the law relating to the devolution of joint rights and liabilities of the joint promisors.
Answer:
Devolution of joint liabilities & joint rights (secs. 42 to 45)
(1) Devolution of joint liabilities (Section 42)
When two or more persons have made a joint promise, then, unless a contrary intention appears by the contract, all such persons, during their joint lives, and, after the death of any of them, his representatives jointly with the survivor or survivors and, after the death of the last survivor, the representatives of all jointly, must fulfil the promise.

(2) Any one of joint promisors may be compelled to perform (Section 43)
When two or more persons make a joint promise, the promisee may, in the absence of an express agreement to the contrary, compel any (one or more) of such joint promisors to perform the whole of the promise.

(3) Each promisor may compel contribution.
Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise unless a contrary intention appears from the contract. Sharing of loss by default in contribution. If any one of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares.

(4) Effect of release of one joint promisor (Section 44)
Where two or more persons have made a joint promise, a release of one of such joint promisors by the promisee does not discharge the other joint promisor or joint promisors; neither does it free the joint promisor so released from responsibility to the other joint promisor or joint promisors.
This section gives to the promisee a right to release any one or more of the joint-promisor from the liability under the joint promise. Once the release is granted, the promisee will not be able to file a suit against the released joint promisor. But, the liability of the other joint-promisor shall continue unchanged. Similarly, the liability of the released joint-promisor towards other joint-promisors for contribution shall also continue.

(5) Devolution of joint rights (Section 45)
When a person has made a promise to two or more persons jointly, then, unless a contrary intention appears from the contract, the right to claim performance rests, as between him and them with them during their joint lives, and, after the death of any of them, with the representatives of such deceased person jointly with the survivor or survivors, and after the death of the last survivor, with the representatives of all jointly.

Question 5.
What are the rules relating to the time, place and manner of performance of the contract?
Answer:
Generally where the time place and manner of performance are prescribed in the contract, then the performance must be given as prescribed. If there is no such agreement is made performance must be made in accordance with the following rules:

(1) Where time is not specified and no application is required to be made:
In such a case the performance must be rendered by the promisor within a reasonable time. What shall be a reasonable time shall depend on the circumstances of each case.

(2) Where time is specified & no application is required to be made: When the performance is to be given on a prescribed day & the promisor has undertaken to perform it without application by the promisee, the promisor may perform it at any time during the usual business hours on such place & on such day at which the promise ought to be performed.

(3) Application for performance on a certain day has to be made: When the promise to be performed on a certain day and the promisor has not undertaken to perform it without the application by the promisee, it is the duty of the promisee to apply for performance at the proper place and within the usual hours of business.

(4) Where no application is to be made and no place for performance has been fixed: In such a case it is the duty of the promisor to apply to the promisee to appoint a reasonable place for the performance of the promise and to perform it at such a place.

Question 6.
What are reciprocal promises? What are its types & what are the rules for the performance of reciprocal promises?
Answer:
Reciprocal Promises (Secs. 51 to 54 and 57)
According to sec. 2(f) promises which form the consideration or part of the consideration for each other, are called reciprocal promises. Such promises are mutual promises, ie. a promise for a promise. When one party gives a promise in consideration for the other’s promise, both the promises are called reciprocal promises. For example, in a transaction of sale, there are two reciprocal promises:
Kinds of reciprocal promises:

• Mutual and independent promises: Where one party has to perform his promise independently without waiting for the performance or willingness of the other party, the promises are mutual and independent. For example, A agrees to sell the car and deliver the same to B on 1.1.2009 while B agrees to pay the price on 15.1.2009. The promises are independent.
• Mutual and dependent: Where the performance of the promise by one party depends upon the prior performance of the promisor or by the other party, the promises are conditional and dependent. For example, X agrees to construct a house for Y. Y agrees to supply cement for building the house. The promises are conditional and dependent.

4 Mutual and concurrent: Where the two promises are to be performed simultaneously, they are said to be mutual and concurrent.
Rules regarding the performance of reciprocal promises : [Secs. 51 to 54]

1. When reciprocal promises have to be simultaneously performed the promisor is not bound to perform, unless the promisee is ready and willing to perform his promise. (Sec. 51)

2. The reciprocal promises must be performed in the order fixed by the contract. (Sec. 52)

3. If one party prevents the other party from performing his reciprocal promise, the contract becomes voidable and the party so prevented can claim compensation. (Sec. 53)

4. Where the nature of reciprocal promises is such that one cannot be performed unless the other party performs his promise in the first place, then if the latter fails to perform he cannot claim performance from the other but must make compensation to the first party for his loss. (Sec. 54)

5. Reciprocal promise to do things legal and also things illegal – The Erst is a contract, but the latter is a void agreement. (Sec. 57)

Question 7.
In which circumstances performance is not required under a contract?
Answer:
Sections 62 to 67 of the Contract Act are listed under the heading “Contracts which need not be performed”. The relevant provisions are as follows:
1. If the parties to the contract agree to substitute a new contract for it or to rescind or alter it, the original contract need not be performed. (Sec. 62).
Where the parties to a contract agree to substitute the existing contract for a new contract, that is called novation. In the well-known case of Scarf v. Jardine (1882) 7 App Cas-345 it was stated that novation is of two kinds, (z) involving a change of parties; or (ii) involving the substitution of a new contract in place of the old (see next chapter for more details).
2. If the promisee dispenses with or remits wholly or in part, the performance of the promise made to him or extends the time for such performance or accepts in satisfaction for it, the contract need not be performed. (Sec. 63)
3. When a voidable contract is rescinded, the other party need not perform his promise. (Sec. 64).
4. “If the promisee neglects or refuses to afford the promisor reasonable facilities for the performance of his promise, the promisor is excused by such neglect or refusal as to any non-performance caused thereby”. (Sec. 67).

Question 8.
What is meant by assignment of contract?
Answer:
Definition: Assignment means transfer. The rights and liabilities of a party to a contract can be assigned under certain circumstances. The assignment may occur

• by an act of parties or
• by operation of law.

Rules: The rules regarding the assignment of contracts are summarised below:

A. Assignment by an act of the parties:
1. Contracts involving personal skill, ability, credit, or other personal qualifications, cannot be assigned. Examples: a contract to marry, a contract to paint a picture, a contract of personal service etc.
2. The obligations under a contract, Le., the burden and the liabilities under the contract cannot be transferred.
3. A contract may be performed through the agency of a competent person if the contract does not contemplate performance by the promisor personally. – Sec. 40. But in this case, the original party remains responsible for the proper performance of the obligations under the contract.
4. The rights and benefits under a contract (not involving personal skill or volition) can be assigned.
5. Actionable claims can be assigned but only by a written document. The notice must be given to the debtor. An actionable claim is a claim to any debt or to any beneficial interest.

B. Assignment by operation of law:
Assignment by operation of law occurs in cases of death or insolvency. Upon the death of a party, his rights and liabilities under a contract devolve upon his heirs and legal representatives (except in the case of a contract involving personal qualifications). In case of insolvency, the rights and liabilities of the person concerned pass to the Official Assignee or the Official Receiver. Assignment by operation of law occurring upon the death of a party is known as succession.

Question 9.
Differentiate between:
(a) Tender of goods & Tender of money
(b) Succession & Assignment
Answer:
(a) Tender of Goods & Tender of money

Tender of Goods	Tender of Money
When the promisor offers to deliver the goods or services in a valid manner, but the promisee refuses to accept the delivery, then such an offer amounts to Tender of Goods.	When the promisor offers to pay the amount due under the contract, to the promisee validly, but the promisee refuses to accept the same, then such an offer amounts to Tender of Money.
On the rejection of a valid tender of goods, the promisor stands discharged from his liability to deliver goods.	On the rejection of a valid tender of money, the promisor is not discharged from his obligation to pay the debt.
Promisor can sue the promisee for the damages sustained by him on account of rejection of the valid tender. Thus the promisee can be sued for damages.	The processor shall be discharged from his obligation to pay interest from the date of rejection of valid tender of money by the promisee.

(b) Succession & Assignment

Basis of distinction	Succession	Assignment
Meaning	The transfer of rights and liabilities of a deceased person to his legal representative is called as succession.	The transfer of rights by a person to another person is called as assignment.
Time	Succession takes place on the death of a person.	Assignment takes place during the lifetime of a person.
Voluntary act	Succession is not a voluntary act. It takes place automatically b the operation of law.	An assignment is a voluntary act of the parties.
Written document	Succession may take place even without any written document.	The assignment requires the execution of an assignment deed.
Scope	All the rights and liabilities of a person are transferred by way of succession.	Only rights can be assigned liabilities, under a contract, cannot be assigned unless there is novation.
Notice	No notice of succession is required to be given to a person.	Notice of assignment must be given to the creditor.
Consideration	No consideration is necessary for succession.	Consideration between assignor and assignee is a must for assignments.

Question 10.
A makes a promise to three joint promisees X, Y & Z. X & Y die before the promise is performed. Who can demand the performance of the promise?
Answer:
Hint: In the case of joint promisees, in the event of the death of one or more joint promisees, the rights and liabilities shall vest with the surviving joint promisees along with the legal representatives of the deceased joint promisees. Thus in this case performance shall be demanded by Z, the surviving joint promisee along with the legal representatives of X & Y.

Question 11.
A owes B two sums, one for ₹ 1000 which is barred by limitation and another for ₹ 1500 which is not barred by the limitation of time. A pays B ₹ 500 on account generally. B later sues A for Rs.1500. A pleads that the amount of debt outstanding to B is ₹ 1000 on account of the settlement of ₹ 500 against the debt of ₹ 1500 and the earlier debt of ₹ 1000 now being time-barred cannot be realized. Comment on the plea of A.
Answer:
Hint: Rules for the appropriation of payments; when the debtor has not given any express instructions for appropriation and nor any implied circumstances exist which indicate the intention of the debtor as to the appropriation of payment, then the appropriation shall be done at the discretion of the creditor. The creditor may at his discretion appropriate the amount received, against any lawful debt or interest outstanding or even against a time-barred debt. Thus B has validly appropriated 500 against the time-barred debt of 1000. The plea of A is not sustainable.

Question 12.
X enters into a contract with B to build a house for him. X builds the house according to the specifications. B tenders the payment but X refuses to accept the money claiming that it was insufficient because the job was more difficult than he had anticipated. What effect has the tender had on B’s obligation?
Answer:
Hint: Tender of money; Rejection of valid tender of money shall not result in the discharge of B from his obligation to pay the amount of money due; however he shall stand discharged from his obligation to pay interest on the amount of debt.

Question 13.
X, Y and Z are partners of software business jointly promise to pay ₹ 30,000 to A. Over a period of time, Y became insolvent, but his assets are sufficient to pay one-fourth of his debts. Z is compelled to pay the whole. Decide whether Z is required to pay the whole amount himself to A in discharging joint promise?
Answer:
Hint: According to Section 43 of the Indian Contract Act, 1872 when two or more persons make a joint promise, the promisee may, in absence of an express agreement to the contrary, compel any one or more of such joint promisers to perform the whole of the promise. Further, if any one of two or more joint promisers makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares. Therefore, in this case, Z is entitled to receive 2,500 from Y’s assets and 13,750 from X.

Question 14.
A agreed to sell 10 tons of wheat to B. No time of delivery has been fixed. At 11 P.M. A takes a truck of wheat to B at his house. Is it a valid tender?
Answer:
Hint: Tender for performance to be valid must be given at a proper place & time; here the tender is not valid, thus B can rightfully refuse to accept the tender of performance.

Question 15.
Krish, Kamya and Ketan are partners in a firm. They jointly promised to pay ₹ 6,00,000 to Dia. Kamya becomes insolvent and her private assets are sufficient to pay 1 / 5 of her share of debts. Krish is compelled to pay the whole amount to Dia. Examining the provisions of the Indian Contract Act, 1872, decide the extent to which Krish can recover the amount from Ketan
Answer:
Hint: The liability of joint promisors is joint & several. The promisee can sue any one of the joint promisors for the performance of the entire promise. Such a joint promisor on the performance of the promise shall be entitled to claim contribution from the other joint promisors. Further, in the event of insolvency of any of the joint promisors, the loss due to non-contribution shall be borne by the other joint promisors equally. Thus in this case Dia can rightfully claim the entire amount from Krish. Since Kamya has become insolvent, ₹ 40,000 is only recoverable from her estate & ₹ 2,80,000 is recoverable from Ketan.

Question 16.
X received certain goods from Y & promised to pay ₹ 60,000. Later on, X expressed his inability to make payment to Z, who is known to X, pays ₹ 40,000 to Y on behalf of X. However, X was not aware of the payment. Now Y is intending to sue X for the entire amount of ₹ 60, 000. Can Y do so? Advice.
Answer:
Hint: When a promisee accepts the performance of a promise from a third person, he cannot afterwards enforce it against the promisor. Thus the performance of a promise by a stranger to contract, if accepted by the promisee, results in the discharge of promisor to that extent, even the latter has neither authorised nor ratified the act of the third party. Thus in the given case by accepting payment of ₹ 40,000 from Z, Y shall be now entitled to sue X only for the balance amount of ₹ 20,000. X shall be discharged up to the extent of ₹ 40,000.

Browsing through Transfer of Ownership – CA Foundation Law Notes help students to revise the complete subject quickly.

Transfer of Ownership – CA Foundation Business Law Notes

Transfer of Ownership:Time of Transfer:
Sale of goods involves transfer of ownership of property from the seller to the buyer. It is necessary to determine the precise moment of time at which the ownership of the goods passes from the seller to the buyer, because of the following reasons:

(a) Risk passes with property:
The general rule is that risk prima facie passes with the property. If the goods are lost or damaged by accident or otherwise, then, subject to certain exceptions, the loss falls on the person who is the owner at the time when the goods are lost or damaged.

(b) Action against third parties:
If the goods are damaged by the action of third parties it is the owner who can take action.

(c) What is the effect of insolvency?
In case of insolvency of either the buyer or the seller it is necessary to know whether the goods will be taken over by the Official Assignee. The answer depends upon whether the ownership of the goods is with the party who has become insolvent.

(d) Suit for price:
Unless the contract provides otherwise, a suit for price by the seller does not lie unless the property has passed to the buyer.

Law Relating To Passing of Risk In Case of The Sale of Goods:
The basic principle is the risk prima facie passes with the ownership. According to section 26 – Unless otherwise agreed, the goods remains at the seller’s risk until the property therein is transferred to the buyer. But when the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not.

Thus risk and ‘property’ (ownership) go together. But it is open to the parties to separate the risk from ownership. For example, the parties may agree that risk will pass sometime after or before the property has passed. The separation of risk from property can be made in the following ways.

Firstly, where delivery has been delayed due to fault of seller or the buyer, the goods are at the risk of the party in fault. Secondly, risk and property may be separated by a trade custom. Thirdly, risk and property can be separated by the agreement of the parties.

When Does Property In the Goods Pass Under The Sale of Goods Act?
Sections 18 to 25 of Sale of Goods Act lay down the rules which determine when ownership of property passes from the seller to the buyer. These rules may be summarised as follow:

• Transfer of Property in Unascertained Goods
• Transfer of Property in Ascertained Goods
• Transfer of Property in Sale by Approval
• Transfer of Property When Right of Disposal is Reserved

A. Transfer of Property in Unascertained Goods:
1. When there is a contract for the sale of unascertained goods, property in the goods is not transferred to the buyer unless and until the goods are ascertained. (Sec. 18).

2. How goods are ascertained? By valid appropriation: Under Section 23(1), in a contract for the sale of unascertained or future goods by description, the property in the goods passes to the buyer when the goods of that description are in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller.

The goods are ascertained by appropriation. Until appropriation there is merely an agreement to sell. Appropriation means selection of goods with the mutual consent of the parties.

The following are the essentials of appropriation:

• The goods should confirm to the description and quality stated in the contract.
• The goods must be in a deliverable state.
• The goods must be unconditionally (as distinguished from an intention to appropriate) appropriated to the contract either by delivery to buyer or his agent or the carrier.
• The appropriation must be
  → by seller with the assent of buyer or.
  → by buyer with the assent of seller.
• The assent may be expressed or implied.
• The assent may be given either before or after appropriation.

Thus, if A agrees to sell to B 20 tonnes of oil of a certain description in his cisterns and he has more than 20 tonnes of oil of description in his cisterns, then no property will pass to B unless the 20 tonnes are separated from the rest and they are appropriated to the contract.

Delivery to the carrier [Sec. 23(2)]:
When the seller delivers the goods, to a carrier for being taken to the buyer, and does not reserve the right of disposal, the property passes to the buyer. The carrier becomes the agent of the buyer and such a delivery amounts to a delivery to the buyer and the risk is, after the delivery of the buyer. The essentials of delivery to a carrier are –

• Delivery must be in pursuance of the contract i.e. the goods must be of the description and quality of the goods contracted.
• Seller delivers goods to the buyer or to a carrier or a bailee for transmission to the buyer. This must be pursuant to the contract,
• Seller does not reserve right of disposal.

B. Transfer of Property in Ascertained Goods:
Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred [Sec. 19(1)].
For the purpose of ascertaining the intention of the parties regard shall be had to –

• the terms of the contract,
• the conduct of the parties, and
• the circumstances of the case. [Sec. 19(2)]

It is only when the intention of the parties cannot be judged from their contract or conduct or other circumstances that the rules laid down in Sections 20 to 24 apply. [Sec. 19(3)].

These rules are as follows:
(a) Specific goods in a deliverable state: [Section 20]:

• in case of an unconditional contract for the sale of specific goods in a deliverable state
• the property in the goods passes to the buyer on making the contract, and
• it is immaterial whether the time of payment of the price or the time of delivery of the goods or both is postponed.

(b) Specific goods to be put in deliverable state: [Section 21]

• where there is a contract for the sale of specific goods and
• the seller is bound to do something to the goods for the purpose of putting them into a deliverable state
• the property in the goods does not pass until such thing is done and the buyer has the notice thereof.

(c) Specific goods to be Weighed or Measured: [Section 22]

• in a contract for the sale of specific goods in a deliverable state
• where the seller is bound to weigh, measure, test or do some other act or thing
• with reference to the goods for the purpose of ascertaining the price
• the property does not pass until such act or thing is done and the buyer has the notice of the same.

C. Transfer of Property in Sale by Approval:
When goods are delivered on approval (Sec. 24): When goods are delivered to the buyer on approval or ‘on sale or return,’ or on other similar terms, the property therein passes to the buyer:

• When he signifies his approval or acceptance to the seller, or
• When the buyer does any other act adopting the transaction, example – pledges the goods or resells them.
• When the buyer retains the goods, without giving notice of rejection, beyond the time fixed for the return of goods, or if no time has been fixed, beyond a reasonable time. In short, the property passes either by acceptance or by failure to return the goods within specified or reasonable time.

D. Transfer of Property When Right of Disposal Is Reserved:
The object of reserving the right of disposal of goods is to secure that the price is paid before the property passes to the buyer. For example, under the VPP (Value Pre Paid) system the ownership passes to the buyer when the price is paid against the delivery of goods, till then the seller retains control over the goods.
Section 25(1) lays down that –
→ in a contract for the sale of specific goods or where goods are subsequently appropriated to the contract

• the seller may reserve the right of disposal of the goods until certain conditions are fulfilled.
• In such a case, even if the goods are delivered to the buyer himself, or to a carrier or other bailee for transmission to the buyer, the buyer does not acquire ownership until the conditions imposed by the seller are satisfied.
• For example, X sends certain goods by lorry to Y and instructs the lorry driver not to deliver the goods until the price is paid by Y to the lorry driver. The property passes only when the price is paid.

→ In the following circumstances, the seller is presumed to have reserved the right of disposal:
(a) By taking a document of title in his own name or his agent’s name. [Sec. 25(2)]:
When goods are shipped or delivered to railways for carriage but the document of title i.e. the bill of lading (in case of carriage of sea) or the railway receipts (in case of carriage by railways) are taken by the seller in his own name or in his agent’s name, the seller is presumed to have reserved the right of disposal. The property passes over to the buyer only when the buyer pays the price in exchange of bill of lading or the railway receipt.

Example:
A sold certain bales of paper to B which were to be sent to him by railway. A took the railway receipt in the name of B, and sent them to his own banker to be delivered to B on the payment of the price.

Before B paid the price, and received railway receipts, the goods were destroyed by fire. The court held that the seller should suffer the loss as he has reserved the right of disposal and at the time of destruction of bales, their ownership has not been transferred to the buyer – [General Papers Ltd. v. V.P. Mohideen & Bros. AIR 1958 Madras 482.]

(b) When the bills of exchange along with the RR/bill of lading is sent to the buyer. [Sec. 25(3)]:
If the goods are delivered to a carrier (i.e. the shipping company or railways) and the bill of lading or RR are taken in the name of the buyer. But the seller draws a bill of exchange on the buyer for the price of the goods, and sends the same to the buyer along with the bill of lading or railway receipts to secure the payment of the price.

The property in goods does not pass to the buyer until he accepts the bill of exchange or pays the price of the goods. If he retains the goods without accepting the bill of exchange or payment of price the property does not pass.

Transfer of Title By Non-Owner or No One Can Give A Better Title Than He Himself Has:
A sale is a contract plus a conveyance. As a conveyance it involves transfer of title of goods from the seller to the buyer. If the seller’s title is defective, the buyer’s title will also be defective. A person can only transfer what he has. No one can transfer a better title to the goods than he himself possesses. This principle is expressed by the Latin phrase, “Nemo dat quad non habet”, which means “none can give who does not himself possess”.

Exceptions:
In each of the following cases, a person who is not an owner, can give to the transferee a valid title to the goods:
1. Transfer of title by estoppel [(Sec. 27)]:
When the true owner of the goods by his conduct or words or by any act or omission leads the buyer to believe that the seller is the owner of the goods or has the authority to sell them, he cannot afterwards deny the seller’s authority to sell. The buyer in such a case gets a better title than that of the seller.

Example:
1. ‘O’ who is the true owner of the goods, causes the buyer ‘B’ to believe that ‘S’ has the authority to sell the goods. ‘O’ cannot afterwards question the seller’s want of title on the goods.

2. ‘A’ was the true owner of goods. ‘B’ the seller told the buyer ‘C’ that the goods belonged to him. ‘A’ was present but remained silent. ‘C’ purchased the goods from ‘B’. Can ‘A’ question the title of ‘C’ over the goods?

2. Sale by a mercantile agent [Proviso to Sec. 27]:
Sale of goods by a mercantile agent gives a good title to the purchaser even in cases where, the agent acts beyond his authority, provided the following conditions are satisfied –

• The agent is in possession of the goods or of a document of title to the goods.
• Such possession is with the consent of the owner.
• The agent sells the goods in the ordinary course business.
• The purchaser acts in good faith and has no notice that the agent had no authority to sell.

“Mercantile Agent”:
‘Mercantile agent’ means an agent having in the customary course of his business as such agent authority either (1) to sell goods, or (2) to consign goods for the purpose of sale, or (3) to buy goods, or (4) to raise money on the security of goods. [Sec. 2(9)]
Good faith – means honestly, whether done negligently or not.

Document of Title to Goods. [Sec. 2(4)]:
A document of title to goods is a document representing goods and is used –

• in the ordinary course of business
• as proof of the ownership, possession or control of goods.

It authorises the possessor of such document to receive or transfer the goods repre sented thereby.

According Sec. 2(4), documents of title to goods includes –

• bill of lading
• dock warrant
• warehouse keeper’s certificate
• wharfinger’s certificate
• railway receipt (R/R), lorry receipt (L/R)
• multimodal transport document
• delivery order.

Thus, document of title is a document, which is the evidence of full ownership of goods represented by the document. Delivery of document of title is as good as giving delivery of goods. Transfer of document of title is a symbolic delivery of goods to the purchaser. The document of title to goods is transferred by endorsement or by mere delivery and it confers a good title to the transferee if he receives it in good faith.

Example:
Delivery of railway receipt is enough to constitute delivery of goods represented by railway receipt.
Document of title shall be distinguished from document showing title to the goods. In case of document showing title to the goods, ownership cannot be transferred by endorsement or mere delivery unlike as in document of title to the goods.

What is bill of lading? When the goods are carried by sea, the carrier of goods issues to the shipper a bill of lading. It is a document of title. Transfer of goods can be effected by transfer of bill of lading. The buyer may demand delivery of goods at the destination on the basis of the bill of lading.

Wharfingers certificate. A Wharf is a platform alongside the water for loading and unloading a ship. A wharfingers certificate is a document issued by a wharfingers. It certifies that the goods specified in it are in the wharf.

3. Sale by one of several joint owners [Sec. 28]:
This section enables a co-owner to sell not only his own share but also of his other co-owners. If one of several joint owners of goods has the sole possession of them by permission of the co-owners, the property in the goods is transferred to any person who buys them from such joint owner provided the buyer acts in good faith and without notice that the seller had no authority to sell.

Section 28 lays down three conditions for validating a sale by one of co-owners:

• He must be in sole possession by permission of his co-owners.
• The purchaser acts in good faith i.e. with honesty.
• The purchaser had no notice at the time of the contract of sale that the seller had no authority to sell.

X, Y & Z own certain truck in common. X is in possession of the truck by permission of his co-owners. X sells the truck to A. A purchases bona fide. The property in the truck is transferred to A.

4. Sale of goods obtained under a voidable agreement [Sec. 29]:
When the seller of goods has obtained possession thereof under a voidable agreement but the agreement has not been rescinded at the time of sale, the buyer obtains a good title to the goods, provided he buys them in good faith and without notice of the seller’s defect of title.

It is to be noted that the above section applies when the goods have been obtained under a voidable agreement, not when the goods have been obtained under a void or illegal agreement. If the original agreement is of no legal effect (void ab-initio) the title to the goods remains with the true owner and cannot be passed on to anybody else.

5. Sale by the seller in possession of goods after sale [Sec. 30(1)]:
Under this exception, a second sale by the seller remaining in possession of the goods will give a good title to the buyer acting in good faith and without notice. Three conditions should be fulfilled under this exception:
(a) The seller must continue in possession of the goods or of the documents of title to the goods as seller. Possession as a hirer or bailee of the goods from the buyer after delivery of the goods to him will not do.

(b) The goods must have been delivered or transferred to the buyer or the documents of title must have been transferred to him.

(c) Good faith and absence of notice of the previous sale on the part of the second buyer.

6. Sale by buyer in possession of goods over which the seller has some rights [Sec. 30(2)]:
This exception deals with the case of a sale by the buyer of goods in which the property has not yet passed to him. When goods are sold subject to some lien or right of the seller (for example for unpaid price) the buyer may pledge, or otherwise dispose of the goods to a third party and give him a good title, provided the following conditions for sell, are satisfied:

• The first buyer is in possession of the goods or of the documents of title to the goods with the consent of the seller.
• Transfer is by the buyer or by a mercantile agent acting for him.
• The person receiving the same acts in goods faith and without notice of any lien or other right of the original seller.

7. Sale by an unpaid seller [Sec. 54]:
An unpaid seller of goods can, under certain circumstances, re-sell the goods. The purchaser of such goods gets a valid title of the goods.

8. Sale under the Contract Act:

• A pawnee may sell the goods of pawher if the latter makes a default of his dues. The purchaser under such a sale gets a good title. [Sec. 176 of Contract Act]
• A finder of goods can sell the goods under certain circumstances. The purchaser gets a good title. [Sec. 169 of Contract Act]
• Sale by an Official Receiver of Liquidator of the company will give the purchaser a valid title.

Browsing through Auction Sale – CA Foundation Law Notes help students to revise the complete subject quickly.

Auction Sale – CA Foundation Business Law Notes

A sale by auction is a public sale where various intending buyers offer bids for the goods and try to outbid each other. Ultimately, the goods are sold to the highest bidder. A bid by the buyer is an offer and it is said to be accepted when the auctioneer announces its completion by the fall of the hammer or in any other customary manner. The words ‘any other customary manner’, takes into account all the manners which may be prevalent to denote acceptance in an auction sale. It may be by shouting one, two, three; or shouting going, going, gone, etc.

A person may himself sell his own goods by auction, or he may appoint an agent, known as auctioneer, to conduct the sale on his behalf.

15.1	Rules of Auction Sale (Sec. 64)	Following rules have been laid down to regulate the sales by auction:
	1. Sale of goods in lots	Where goods are put up for sale in lots, each lot is prima facie deemed to be the subject of a separate contract of sale.
	2. Completion of Sale	An auction sale is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner, and until then the bidder has the right to revoke or retract his bid. If before the fall of the hammer the bidder withdraws, his security amount cannot be forfeited. But if he does so after the fall of the hammer, it amounts to a breach of the contract and his security amount will be liable to be forfeited. If the conditions of sec. 20, namely, the goods should be specific and in a deliverable state, are satisfied, the property in such goods passes to the buyer at the completion of the contract (by the fall of the hammer)
	3. Seller’s Right to Bid	Unless the auction is notified to be subject to a right to bid on behalf of the seller, it is not lawful – (i) for the seller to bid himself or to employ any person to bid at such sale on his behalf and (ii) for the auctioneer to, knowingly take any bid from the seller or any such person. Any contravention of this rule renders the sale as fraudulent.
	4. Pretended bidding	If the seller makes use of pretended bidding to raise the price, the sale is voidable at the option of the buyer. However, the seller may expressly reserve the right to bid at the auction and in such case, the seller or any one person on his behalf may bid at the auction. But there should be only one person on behalf of the seller; if there are more than one person, the intention is to raise the price and is fraudulent.
	5. Reserve Price	The seller may notify that the auction will be subject to a reserve or upset price, that is, the price below which the auctioneer will not sell. In such a case the auctioneer is not bound to accept the highest bid unless it reaches the reserve price. Further the property in the goods, even if they are specific, will not pass if the highest bid falls short of the reserve price.
	6. Knock-out agreement	Knock-out agreement is a form of combination of buyers to prevent competition among themselves at an auction sale. They agree that they will not raise the bid against each other and only one of them will bid of the auction. When the goods have been purchased they will share the profits. Prima facie, a knock-out agreement is not illegal. However, if the intention of the parties to the agreement is to defraud third party, the third party can claim the damages. The seller may protect his interests against such agreements by reserving his right to bid at the auction, or by fixing a reserved price.
15.2	Upset price	“Upset price” is the Scottish equivalent of “reserved price”.
15.3	Damping	It is an unlawful act by which an intending purchaser is prevented from bidding or raising the price at an auction sale. The damping is usually done in any of the following ways: (i) By pointing out defects in the goods put up in an auction sale. (ii) By taking the intending buyers away from the place of auction by some other device. Damping is illegal and the auctioneer can withdraw the goods from auction sale in case he observes that the damping is being resorted to. Puffer – A person who is appointed by the seller to raise the price by fictitious bids.
15.4	Incidence of Taxation [Sec. 64A]	1. Where after a contract has been made but before it has been performed, tax revision takes place, the parties would become entitled to readjust the price of the goods accordingly. Taxes covered are customs or goods and service tax on the goods and any tax payable on manufacture, sale or purchase of goods. 2. The buyer would have to be pay the increased price if the tax increases and would be entitled to the benefit of reduction if taxes are curtailed. 3. Thus, the seller may add the increased taxes in the price. 4. The effect of the provision can, however, is excluded by an agreement to the contrary. It is open to the parties to stipulate anything about the incidence of taxation.

 

Browsing through Conditions and Warranties – CA Foundation Law Notes help students to revise the complete subject quickly.

Conditions and Warranties – CA Foundation Business Law Notes

Sec. 12 of the Sale of Goods Act states that a stipulation (or term) in a contract of sale with reference to goods may be a condition or a warranty.

Condition:
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. [Sec. 12(2)]

For example, A wants to buy a car which can give a mileage of 20 kms/litre. B, the car dealer, points out at a particular car and says “this car will suit you”. A buys the car. But later on he finds that the car is giving a mileage of only 10 kms/litre. There is a Breach of Condition, because the stipulation made by B forms the very basis of the contract.

Warranty:
A warranty is stipulation collateral to the main purpose of the contract, the breach of which gives | rise to claim for damages but not a right to reject the goods and treat the contract as repudiated – [Sec. 12(3)]

For example:
A goes to B, a car dealer, and says, “I want a good car” The car dealer shows him a car and says, “it can give you a mileage of 20 kms/litre”. A buys the car. Later on, A finds that the car is giving a mileage of 10 kms/litre only. There Is A Breach of Warranty, because the stipulation made by the seller was only collateral one.

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 maytbe a condition, though called a warranty in the contract – [Sec. 12(4)]

Conditions and warranties may be expressly stated or may be implied by law. Implied conditions and warranties are enumerated in sections 14 to 17. They are deemed to be incorporated in every contract of sale unless the terms of the contract show a contrary intention.

When a condition can be treated as a warranty – Voluntary waiver of a condition [Sec. 13(1)]:
1. Where a contract of sale is subject to a condition to be fulfilled by the seller, the buyer may –

• waive the condition, for example a buyer may accept defective goods or accept goods beyond stipulated time.
• elect to treat a breach of condition as a breach of warranty, i.e. instead of repudiating the contract he may accept performance and sue for damages, if he has suffered any.

Once a buyer decides to waive, he cannot afterwards insist on its fulfilment.

Compulsory waiver of a condition [Sec. 13(2)]:
Where a contract of sale is not severable (ie. indivisible) and the buyer has accepted the goods or a part thereof, he cannot repudiate the contract but can only sue for damages. In such a case, the breach of condition can only be treated as a breach of war ranty, unless there is a contract to the contrary. [Sec. 13(2)]

Example:
W bought laptops from M and resold it to C without examining the laptops. The laptops were defective. It was held that W must be deemed to have accepted the goods and therefore he could not repudiate the contract but could claim only damages.

→ However, there may be an agreement between the parties which may be contrary to section 13(2). In that case the parties may agree between themselves that the provision of section 13(2) will not apply in their case and the buyer shall have a right to reject the goods even though he has accepted the indivisible goods.

→ If the contract of sale is divisible and the buyer has accepted a part of the goods, he can still exercise the right to reject the remaining goods.

→ Impossibility [Sec.13(3)]:
The above provisions of Section 13(1) and 13(2) do not affect the cases where the fulfilment of any condition or warranty is excused by law by reason of im-possibility or otherwise. This means that under section 13(3) the seller has the right to rely upon impossibility as an excused in appropriate cases, if sued by the buyer.

Condition	Warranty
Condition is a term, which is essential to the main purpose of the contract.	Warranty is only a collateral term. It is subsidiary to the main purpose of the contract.
Breach of a condition gives the aggrieved party a right to repudiate the contract and also to claim damages.	Breach of warranty entitles the aggrieved party to claim damages only. He cannot repudiate the contract.
A breach of condition may under certain circumstances, be treated as breach of warranty	But a warranty cannot become a condition.

Implied Conditions And Warranties:
A stipulation (or term) in a contract of sale of goods may be express or implied. Express terms are those which have been expressly agreed upon by the parties. Implied terms are those which have been enacted in the Sale of Goods Act. Sections 14 to 17 of the Act contain a list of conditions and warranties which are implied in a contract for the sale of goods, unless the circumstances of the contract are such as to show a different intention. The implied conditions and warrants are stated below:

(a) Implied conditions:
1. Implied condition as to title. – [Sec. 14]:
There is an implied condition on the part of the seller that, in the case of a sale he has the right to sell the goods, and in the case of an agreement to sell, he will have the right to sell the goods at the time when the property is to pass. If the seller’s title turns out to be defective, the buyer is entitled to reject the goods and claim refund of the price plus damages.
(i) A bought a motor car from B. He used it for 3 months and thereafter the car was detected to have been stolen. A was compelled to return it to the true owner. Could A recover the sale price from B?
Answer:
Yes

(ii) A sells to B tins of condensed milk labelled “Nissly Brand” and this is proved to be an infringement of Nestle Company’s trade mark. Is it a breach of implied condition as to title?
Answer:
When a person sell the goods by infringing a copyrights or trademark of the others, he is considered as not having right to sell such goods.

2. Implied condition in a sale by description. – [Sec. 14]:
Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description. “Correspond with the description” means that the buyer must get the goods that he has asked for. The description may be given –

• by mentioning qualities or characteristics of the goods. Example – Basmati rice.
• by mentioning the trademark or brand name. Example – Videocon TV.
• by the type of packing. Example – 1 kg. packing of tea in plastic jar.

If the buyer does not get the goods he has described he can reject the goods. The rule is “If you contract to sell peas, you cannot oblige a party to take beans. If the description of the article tendered is different in any respect, it is not the article bargained for, and the other party is not bound to take it”.

Example – A car is sold as a “new maruti car”. The buyer finds it to be a used one. The buyer may reject the car or retain the car and claim damages.

3. Implied condition in a sale by sample as well as by description. – [Sec. 15]:
When goods are sold by sample as well as by description, the goods shall correspond both with the sample and with the description.

4. Implied condition as to fitness or quality. – [Sec. 16(1)]:
The general rule is, there is no implied condition as to quality or fitness for the purpose of the buyer. This is based on the doctrine of “caveat emptor” that is, let the buyer beware. It means that while buying the goods, it is the responsibility of the buyer to check that the goods he is buying would suit his purpose or not.

However, in the following situation, the responsibility as to fitness of goods falls upon the seller:
a. where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required,

b. so as to show that the buyer relies on the seller’s skill, or judgment, and

c. the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose.
→ A contracts to make and deliver a set of false teeth to B. The false teeth do not fit in the mouth of B. B is entitled to reject the goods.

→ X places order for lorries to be used for ‘heavy traffic in a hilly country’. The lorries were unfit for this purpose and broke down. It was held that there was breach of condition as to fitness.

Sale under patent or trade name:
Proviso to section 16(1) lays down that 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. It is so because in such a case the buyer is not relying on the skill and judgment of the seller but relies on the patent name.

For example, a hotelier orders ‘Sujeet’ juicer and mixer (patent product) for his business. The juicer and mixer supplied was found to be unsuitable for commercial use. The buyer has no cause of action against the seller, since he purchased the juicer by its patent name.

5. Implied condition as to merchantability. – [Sec. 16(2)]:
Where goods are brought by description from a seller who deals in goods of that description, there is an implied condition that goods shall be of merchantable quality. Merchantable means that the goods are commercially saleable and that they are hit for the purpose for which they are generally used.

Where the buyer examines the goods prior to sale, there is no implied condition as to merchant¬; ability as regards defects which such examination ought to have revealed. However, inspite of exanimation, if the goods have certain latent defects which no examination could reveal, the implied condition remains.
→ X bought a colour TV from M/s Concord Electronics. The TV was defective right from the beginning and it did not work inspite of repairs by expert technicians. There is a breach of implied condition as to merchantability and the dealer will have to take back the defective TV and refund the amount.

→ X orders motor horns from a manufacturer. The horns supplied are defective. X is entitled to reject them as unmerchantable.

6. Implied condition in a sale by sample. – [Sec. 17]:
When goods are to be supplied according to a sample agreed upon, the following conditions are implied:
(a) The bulk shall correspond with the sample in quality.

(b) The buyer shall have a reasonable opportunity of comparing the goods with the sample.

(c) The goods shall be free from any latent defect (hidden defect) rendering them unmerchant able. Latent defects are the defects which would not be apparent on reasonable examination of the sample and they can be discovered only when the goods are put to use. If the defect is easily discoverable on inspection and the buyer takes delivery after inspection, he has no remedy.

A sale is by sample where there is a term in contract, express or implied to that effect. The effect of the section is that where goods are sold by sample, there should not be any latent defect therein which renders them unmerchantable.

7. Implied condition as to wholesomeness:
In case of food stuff and eatables, in addition to the implied condition as to merchantability, there is another implied condition that the goods shall be wholesome that is fit for human consumption.

X bought milk from Y, a dairy owner. The milk was contaminated with germs of typhoid fever. X’s wife, on taking the milk, became infected and died of it. Y was held liable in damages.

(b) Implied warranties:
In the absence of an agreement to the contrary, the following warranties are implied in every con-tract of sale:
1. The buyer must get quiet possession [Sec. 14(b)]:
The buyer shall have and enjoy quiet possession of the goods.

For example:
X has given his car on hire for a period of one month to Y. Thereafter, X sold it to Z without disclosing to him that Y was en-titled to use the car on account of the hire agreement. Z claims the car from Y. Y’s possession is disturbed. He can claim damages from X.

2. The goods must be free from encumbrance [Sec. 14(c)]:
There is an implied warranty that the goods shall be free from any charge or encumbrance in favour of a third party not declared or known to the buyer before or at the time when the contract his made. The effect of this clause is that if the buyer pays off the charge of encumbrance, he will be entitled to recover the money from the seller.

3. Warranty for quality or use by usage of trade [Sec. 16(3)]:
A warranty as to fitness for a particular purpose may be annexed to a contract of sale by a custom or usage of trade.

4. Disclosure of dangerous nature of goods:
Where the goods are dangerous in nature and the buyer is ignorant of the danger, the seller must warn the buyer of the probable danger. If there is a breach of this warranty, the seller may be liable ! in damages.

Note:
1. Express terms – [Sec. 16(4)]:
An express warranty or condition does not negate a warranty or condition implied by the Act. (Unless the express terms are inconsistent with the implied conditions). This means that implied warranty or condition may co-exist with express warranty or condition. Thus, for example, where sleepers supplied to a railway company were required to be approved by its experts, it was held that it did not exclude the implied condition of merchantableness.

2. Exclusion of implied terms – [Sec. 62]:
These implied conditions and warranties may be example – eluded or modified by the parties to the contract by express contract, by course of dealing i and by usage of trade.

The Doctrine OF Caveat Emptor:
Caveat Emptor is a Latin expression, which means, “Buyers Beware”. The doctrine of caveat emptor means that, ordinarily, a buyer must buy goods after satisfying himself of their quality and fitness. If he makes a bad choice he cannot blame the seller or recover damages from him. This doctrine is stated in the opening words of section 16: 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 I for any particular purpose of goods supplied under a contract of sale.

• It is buyer’s duty to examine goods thoroughly.
• The buyer should ensure at the time of purchase that the goods conform to his requirements.
• If the goods turn out to be defective, buyer cannot hold the seller responsible.

Exceptions:
The doctrine of caveat emptor does not apply in the following situations:
1. Fitness as to quality or use. [Sec. 16(1)]:
→ Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required,

→ so.as to show that the buyer relies on the seller’s skill, or judgment, and

→ the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or not, there is an implied condition that the goods shall be reasonably fit for such purpose.)

In Priest Vs. Last, P purchased a hot water bottle from a chemist. The chemist informed him that I the bottle was specially meant for holding hot water. At the time of use, the bottle burst as soon as hot water was poured into it and injured P’s wife. Chemist was held liable to pay damages to P. However, this rule does not apply when the goods are sold under a patent or a brand name.

2. Sale of goods by description. [Sec. 16(2)]:
Where there is a sale of goods by description, there is an implied condition that the goods are merchantable that is, fit for particular purpose.

3. Trade usage. [Sec. 16(3)]:
An implied condition of fitness may be annexed to a contract of sale by usage of trade.

Example – In ready made garment business, there is an implied condition by usage of trade that the garments shall be reasonably fit on the buyer.

4. Where the seller is guilty of fraud:
Where the seller makes a false representation and buyer relies on that representation, the doctrine of caveat emptor will not apply. In such a case the buyer will be entitled to the goods according to that representation.

5. Where seller actively conceals a defect:
Where the seller actively conceals a defect in the goods so that the same could not be discovered on a reasonable examination, the doctrine of caveat emptor will not apply. Such a contract will be voidable.

6. Sale by sample:
When goods are purchased by sample, the bulk must correspond with the sample and the buyer I must have reasonable opportunity of inspecting the goods.

7. Sale by sample as well as description:
The doctrine of Caveat Emptor is not applicable if the goods do not correspond to both, sample as well as description.

Browsing through Rights of Buyer & Rights of Unpaid Seller – CA Foundation Law Notes help students to revise the complete subject quickly.

Rights of Buyer & Rights of Unpaid Seller – CA Foundation Business Law Notes

Rights of Buyer:
A General Rights:

• Right to have delivery as per contracts (Secs. 31 & 32).
• Right to reject the goods if they are delivered in wrong quantities (Sec. 37).
• Right to refuse delivery of goods by instalments (Sec. 38)
• Right to notice of shipment in case the goods are sent by sea so that he may get the goods insured (Sec. 39).
• Right to examine goods for the purpose of ascertaining whether they are in conformity with the contract (Sec. 41)

Rights of A Buyer Against the Seller For Breach of Contract:
A seller may breach the contract in any of the following ways:

• He fails to deliver the goods at the time or in the manner called for in the contract.
• He repudiates the contract.
• He delivers non-conforming goods and the buyer rightfully rejects the goods or properly revokes acceptance.

A buyer has the following rights against the seller for breach of contract under the Sale of Goods Act.
1. Suit for non-delivery [Sec. 57]:
Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may 1 sue the seller for damages for non-delivery. This remedy would be available even if the property I has passed to the buyer.

2. Specific performance [Sec. 58]:
Where property has passed to the buyer, he also can exercise another right, viz., a right to sue for j specific performance and its limits are regulated by the Specific Relief Act. In such cases the court may in its discretion grant a decree ordering the seller to deliver those specific or ascertained goods which formed the subject-matter of the contract. It should be noted that the remedy is discretionary and will only be granted if the damages are not an adequate remedy or the goods are unique, e.g., rare book, a picture or a rare piece of jewellery.

3. Breach of Warranty [Sec. 59]:
Where there is a breach of warranty by the seller (i.e. defects in the goods delivered) or where the buyer elects or is compelled to treat any breach of condition on the part of the seller as a breach of warranty, the buyer has the following remedies:

• He may claim a deduction from the price.
• He may refuse to pay the price altogether, if the loss equals the price.
• If the loss exceeds the price, he may not only refuse to pay the price, but also claim the excess, or
• He may sue the seller for damages for the breach of warranty in addition to the right to claim diminution or extinction of the price.

4. Suit for Anticipatory breach [Sec. 60]:
The buyer has the right to sue the seller for damages for anticipatory breach of contract Section 60 lays down that where the seller repudiates the contracts before the date of delivery, the buyer may either treat the contract has subsisting and wait till the date of delivery or he may treat the contract as rescinded and sue for damages for the breach.

5. Suit for interest and recovery of the price [Sec. 61]:
If the buyer has already paid the price and the seller fails to deliver the goods, the buyer is entitled to file a suit for the refund of the price.

In such a suit, the buyer may also claim interest or special damages from the defaulting seller. In the absence of any other contract to the contrary, the court may award interest at such rate as it thinks fit on the amount of price from the date on which the payment was made.

Rights of The Unpaid Seller:

• Unpaid seller defined [Sec. 45]
• Unpaid sellers’ rights [Sec. 46]
  → Unpaid sellers ’ lien [Secs. 47 to 49]
  → Stoppage in transit [Secs. 50 to 52]
  → Transfer by buyer and seller [Secs. 53 & 54]
• Suit for breach of the contract [Secs. 55 to 61 ]

Who is an unpaid seller?
The seller is deemed to be an unpaid seller under any of the following circumstances:

• If the whole of the purchase price is not paid on the due date.
• If payment is made in the form of a negotiable instrument. (Bill of exchange or cheque) and the instrument is dishonoured.

Unpaid Sellers’ Rights [Sec. 46]:
Rights of an unpaid seller can be listed as follows:
1. Against the good:

• Right of Lien,
• Right of Stoppage in Transit, and
• Right of Resale

2. Against the buyer personally:

• Suit for price,
• Suit for damages for non-acceptance of delivery
• Suit for damages for repudiation of the contract
• Suit for interest or special damages

Right of Unpaid Seller against the Goods:
(I) Right of Lien or Vendor’s Lien [Secs. 47-49]:
The ‘unpaid seller’ has a lien on the goods for the price while he is in possession, until the payment or tender of the price. A lien is a right to retain possession of goods until payment of the price. He is entitled to lien in the following three cases, namely;

• where goods have been sold without any stipulation as to credit; i.e. cash sale.
• where goods have been sold on credit but the term of credit has expired
• where the buyer becomes insolvent.

Rules:
1. The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.

2. If the goods have been sold on credit, the seller cannot refuse to part with possession unless the term of credit has expired.

3. Lien can be exercised for non-payment of the price, not for any other charges.

4. Effect of part delivery (Sec. 48): When an unpaid seller has made a part delivery of the goods he can exercise lien on the balance of the goods not delivered unless the part delivery was made under such circumstances as to show an intention to waive the lien.

5. The seller can abandon or waive the lien if he so desires.

6. Termination of lien (Sec. 49): If possession is lost, lien is lost. The unpaid seller of goods loses his lien thereon in the following cases:

• When he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods
• when the buyer or his agent lawfully obtains possession of the goods
• where the seller has waived the right of lien. The unpaid seller does not lose his lien by reason only that he has obtained a decree for the price of the goods.

7. Sale not rescinded by lien (Sec. 54): A contract of sale is not rescinded by the mere exercise of the right of lien. The contract still remains live and the buyer can claim delivery of the goods by tendering the price. However, if the buyer defaults, the sellers remedy is to resell the goods and claim damages.

(II) The Right of Stoppage in Transit [Secs. 50-52]:
When the buyer of goods becomes insolvent, and the goods are in course of transit to the buyer, the seller can resume possession of the goods from the carrier. This is known as the right of stoppage in transit. The right is exercisable by the seller only if the following conditions are fulfilled:
(I) The seller must be unpaid:

• He must have parted with the possession of goods.
• The goods must be in transit.
• The buyer must have become insolvent.
• The right is subject to provisions of the Act.

The right of stoppage means the right to stop further transit of the goods to resume possession and to retain the same till the price is paid.

Who is an insolvent? The term insolvent is used here to denote a person who is financially embarrassed. It is not necessary that the buyer should be declared insolvent by a court of law before the right of stoppage in transit can be exercised.

According to section 2(8). The buyer is said to be ‘insolvent’ when he has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due whether he has committed an act of insolvency or not.

Rules: The following points are to be noted in connection with the right of stoppage in transit:
1. Duration of transit [Sec. 51]:
The goods are deemed to be in course of transit from the time they are delivered to a carrier or other bailee for the purpose of transmission to the buyer, until the buyer or his agent takes delivery of them.

2. When does transit end?
(a) Delivery before destination:If the buyer or his agent obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end. [Sec. 51(2)]

(b) Attornment by carrier to buyer: if after the arrival of the goods at the appointed destination, the carrier expressly or by implication enters into a new agreement to hold the goods for the buyer (for purpose of custody), the original transit comes to an end. [Sec. 51(3)]

(c) Goods rejected by buyer: If the goods are rejected by the buyer and they continue to be in possession of the carrier or other bailee, then the transit continues even if the seller has refused to receive them back. [Sec. 51(4)]

(d) Delivery on ship chartered by buyer: When the goods are delivered to a carrier who is acting as agent of the buyer, e.g. when goods are delivered to a ship chartered by the buyer, the transit comes to an end as soon as the goods are loaded on board the ship. [Sec. 51(5)]

(e) Wrongful refusal by carrier to deliver: If the carrier wrongfully refuses to deliver the goods to the buyer, the transit is at an end. [Sec. 51(6)]

(f) Part delivery. Where the part delivery of the goods has been made to the buyer the remainder of the goods may be stopped in transit, unless such part delivery has been given in such circumstances as to show an agreement to give up possession of the whole of the goods. [Sec. 51(7)]

3. How stoppage in transit is effected [Sec. 52]:
There two modes of stoppage in transit are –

• By taking actual possession of the goods or
• By giving notice to the carrier not to deliver the goods to the buyer or his agent.

When notice of stoppage in transit is given by the seller to the carrier or other bailee in possession of the goods, he shall re-deliver the goods to, or according to the directions of, the seller. The expenses of such re-delivery shall be borne by the seller.

Effect of Stoppage:
Contract not rescinded – The contract of sale is not rescinded when the seller exercises his right of stoppage in transit. The contract still remains in force and the buyer can ask for delivery of goods on payment of price. [Sec. 54]

Effect of sub-sale or pledge by the buyer [Section 53]:
The unpaid seller’s right of lien or stoppage in transit is not affected by any sale or pledge of the goods made by the buyer.

Exceptions:
In the following two cases the unpaid seller’s right of lien or stoppage in transit is affected by any sale or pledge of the goods made by the buyer: (i.e. Unpaid seller cannot exercise right of lien or stoppage in transit.)

• when the seller assents to such sale or pledge; or
• when the seller has transferred a document of title to the goods, who transfers it by way of a sale, pledge or other disposition for value, to a person who takes it in good faith and for consideration.

Where (i) the seller has issued or lawfully transferred a document of title to goods, e.g. a bill of lading or a railway receipt to a person as buyer and (ii) the buyer transfers the document by way of sale or pledge to a person who takes the document in good faith and for consideration.

In such a case if the transfer is by way of sale the unpaid sellers right of lien or stoppage is defeated, and if it was by way of pledge, his right of lien or stoppage can only be exercised subject to the rights of the pledgee. Thus the effect of the rule is that the seller may still exercise his rights by paying off the pledgee.

Distinction Between Lien And Stoppage In Transit:
(1) The essence of lien is to retain possession while the essence of the stoppage in transit is to regain possession.

(2) The right of lien is applicable to goods, which are in the possession of the seller. The right of stoppage in transit is applicable to the goods, which are in possession of the carrier.

(3) The right of stoppage in transit is applicable to the insolvent buyer. But the right of lien is applicable to all persons, solvent or insolvent.

(4) The right of stoppage in transit is applied to the buyer through the carrier. Therefore stoppage means the seller’s right to ‘regain’ the goods. But lien means the right to ‘retain’ the goods. of course both the rights are applicable to goods only.

(5) When the right of lien ends the right to stop in transit begins.

(III) The Right of Resale [Sec. 54]:
The unpaid seller who has retained possession of the goods in exercise of his right of lien or who has resumed possession from the carrier upon insolvency of the buyer, can resell the goods:

If the goods are of a perishable nature, without any notice to the buyer, and
In other cases after notice to the buyer, calling upon him to pay or tender the price within reasonable time, and upon failure of the buyer to do so.

If the money realised upon such resale is not sufficient to compensate the seller, he can sue the buyer for the balance. But if he receives more than what is due to him, he can retain the excess. A §. resale does not absolve the buyer from his liabilities to compensate the seller for damages he may have suffered.

Right of Unpaid seller against the buyer personally:
1. Suit for the Price [Sec. 55]:
Where under a contract of sale the property in the goods has passed to the buyer and the buyer ; wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.

Where the property in goods has not passed to the buyer, the seller as a rule cannot file a suit for the price and his remedy is to claim damages. According to section 55(2), where under a contract of sale the price is payable on a certain day irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract.

2. Suit for damages for non-acceptance [Sec. 56]:
Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance.

3. Suit for damages for repudiation of the contract [Sec. 60]:
Where the buyer repudiates the contract before the date of delivery, the seller may either treat the contract as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach.

4. Claim for interest and special damages [Sec. 61]:
The seller may recover interest or special damages in any case where by law interest or special damages may be recoverable. He may also recover the money paid where the consideration for the payment of it has failed.

CA Foundation Accounts Study Material: Aspirants that are applying for the ICAI CA Foundation exam, will be studying different types of books and different types of model papers to get a good score. Institute of Chartered Accountants of India also provides some study materials, and PDF downloads of CA Foundation Accounts 2023 to help the students in their exams. You can simply go through them by downloading them free of cost. Even the applicants will get a hard copy of study materials to their address from the ICAI through couriers.

If you cannot able to see the study materials on the website or in case if you didn’t get the courier, you can check out our article, as we have provided the notes of CA Foundation Accounts same taken from the ICAI website. Follow the article, even you can learn more other information along with recommendation books.

• ICAI CA Foundation Accounts Study Material Notes
• ICAI Accounts Study Material for CA Foundation
• CA Foundation Accounts Chapter Wise Weightage
• Best Books That are Recommended by ICAI For CA Foundation Accounts
• How to prepare for the CA foundation accounts Exam?
• Is ICAI study material enough to pass CA foundation accounts?
• Can I complete the study material for CA foundations in 1 month?
• Are CA foundation accounts exams easy?

ICAI CA Foundation Accounts Study Material Notes | Accounts CA Foundation Notes

ICAI has released the study material of CA foundation accounts 2023, for the students who applied for the ICAI CA Foundation exam. In that study material, we will have complete information on the topic. These study materials are nothing but the books Organised by ICAI. You can download these study materials from the official website of ICAI. Even you can check out below study materials for your reference and all of these are taken from the official website.

ICAI Accounts Study Material for CA Foundation | CA Foundation Accounts Notes Study Material

ICAI assists students to study well by providing subject-specific study materials. If you are unable to find the study material PDF on the official website you can check it out here below. As you can see below, we have provided you the ICAI Accounts study material of the CA foundation that was taken from the official website. Even we have provided you with some test papers.

• Meaning and Scope of Accounting
• Accounting Concepts, Principles and Conventions
• Accounting Standards
• Accounting Policies
• Accounting as a Measurement Discipline-Valuation Principles, Accounting Estimates
• Capital and Revenue Expenditure
• Contingent Assets and Contingent Liabilities
• Accounting Process (Journal, Ledger, Trial Balance, Cash Book, Subsidiary Books)
• Bank Reconciliation Statement
• Bills of Exchange
• Rectification of Errors
• Inventory Valuation
• Depreciation
• Sale on Approval Basis
• Final Accounts
• Consignment Accounting
• Partnership
• Average Due Date
• Account Current
• Not-for-Profit Organisation
• Shares
• Debentures
• Financial Statement of Companies (Schedule III)

Once you have completed all the syllabus that was provided above, you can take a test by looking at the below question papers and know how much you have prepared well.

• CA Foundation Accounts Question Paper
• CA Foundation Principles and Practice of Accounting Question Paper

CA Foundation Accounts Chapter Wise Weightage Syllabus: Principles and Practicing of Accounting

Knowing the CA Foundation Accounts Chapter Wise Syllabus Weightage for the students who are going to write this exam is essential. Because by knowing this they can prepare well with the chapters that have the highest weightage. Check out the below Chapter Wise Weightage for Accounts 2023 to crack your exam easily.

CA Foundation Accounts Book Pdf Chapter Name	May 2018	November 2018	May 2019	November 2019	November 2020
1. Meaning and scope of Accounting	–	–	–	–	4
2. Accounting Concepts, Principles and Con­ventions	–	–	4	2	2
3. Accounting Standards	–	–	–	–	–
4. Accounting Policies	–	–	–	–	–
5. Accounting as a Measurement discipline-Val­uation Principles, Accounting estimates	–	–	–	–	–
6. Capital and Revenue Expenditure	2	2	2	2	2
7. Contingent Assets and Contingent Liabilities	4	–	–	4	–
8. Accounting Process (Journal, Ledger, Trial Balance, Cash Book, Subsidiary Books) Basics of interpretation	–	–	–	7	4
9. Bank Reconciliation Statement	10	10	10	10	10
10. Bills of Exchange	–	–	5	2	10
11. Rectification of Errors	16	10	6	10	7
12. Inventory Valuation	–	–	5	5	10
13. Depreciation	–	6	10	4	5
14. Sale on approval basis	5	5	–	5	–
15. Final Accounts	20	11	10	15	15
16. Consignment Accounting	10	12	2	10	7
17. Partnership	12	15	12	12	12
18. Average Due Date	5	5	5	5	5
19. Account Current	7	5	2	5	5
20. Not for Profit Organisation	–	12	10	10	10
21. Shares	12	10	10	15	12
22. Debentures	–	5	5	–	5
23. Financial Statement of Companies	–	–	–	2	–

Best Books That are Recommended by ICAI For CA Foundation Accounts

Look into the books for CA Foundation Accounts that are recommended below taken from ICAI.

• Company Accounts – CA K Saravanan
• Partnership Accounts(Admission, Retirements, and Death) – CA K Saravanan
• Account Current  – CA K Saravanan
• Sale or Return Basis – CA K Saravanan
• Non profit organisation – CA K Saravanan
• Consignment  – CA K Saravanan
• Bills of Exchange – CA K Saravanan
• Theory(Including Capital and Revenue expenditure and receipts) – CA K Saravanan

FAQs on CA Foundation Accounts Study Material

1. How to prepare for the CA foundation accounts Exam?

Below are some of the points to consider for preparing for the CA foundation accounts exam.

• Prepare a timetable.
• Prepare notes while studying that will help you to revise.
• Command over the calculator.
• Focus on Weightage chapters.

2. Is ICAI study material enough to pass CA foundation accounts?

Yes, ICAI study material is enough to pass the CA foundation accounts exam. And if you want you can also revise many other recommended books to get a good score.

3. Can I complete the study material for CA foundations in 1 month?

Yes, you can complete the study material for CA foundations in 1 month but it will be very hectic and even you can’t remember well. So make a timetable to get time to revise 3 times at least.

4. Are CA foundation accounts exams easy?

Yes, the CA foundation accounts exam is easy if you study thoroughly from study materials, recommended books, test papers, and revision.

Key Upshots

Our team is hoping that the data that was disclosed above on CA Foundation Accounts Study Material helped you a lot in preparing for the exam to get a good score. Not only this article we have all other papers on CA at our gstguntur.com website. Follow the website and comment with your suggestions below, definetly we will work on it. Share with your friends and help them to score good marks.

CA Foundation BCK Notes: As we all know, CA exams are the toughest in India. And if we do not prepare well we cannot pass the exam. If we want to get good marks in the exam, the best books, study materials, and notes are very important. If you are the one who applied for the CA foundation exam and think to start preparing for paper-4(BCK) then you have come to the right place.

Even though you can download PDF and study materials from the official website, it might be a little confusing as it will have many links, by following our website you can directly download the links and prepare. The syllabus we have given chapter-wise was taken from the official website only. If you look into this article, along with the PDFs we have provided extra information like the weightage of BCK Question paper chapters wise and way to download PDFs from the official website, and many more.

• ICAI CA Foundation BCK Study Material Notes
• CA Foundation BCK Notes Pdf
• CA Foundation BCK MCQ Questions Pdf
• Business Correspondence and Reporting CA Foundation Chapter Wise Weightage
• How To Download CA Foundation BCK Study Material From Official Website
• Best Books To Refer For Business and Commercial Knowledge
• Which study material is best for CA Foundation BCK preparation?
• How to get CA Foundation BCK study material?
• Is the CA foundation BCK study material available for free?

ICAI CA Foundation BCK Study Material Notes | Business and Commercial Knowledge BCK CA Foundation Notes

Students preparing for the CA Foundation BCK exam can download the PDF links chapter-wise from the official website of ICAI or from this page easily free of cost. And the syllabus that was provided below was the latest revised syllabus of 2023. Below we have provided the notes for every chapter and MCQ question, which will help to score well in the exam.

Click on the links below and start preparing for the exam.

CA Foundation BCK Notes Pdf Study Material | CA Foundation BCK Chapter Wise Questions

With reference to the official website of ICAI, we have provided some chapter-wise notes and study material for the CA Foundation BCK paper. Check out the below link one by one.

• Chapter 1 Business and Commercial Knowledge: An Introduction Notes
• Chapter 2 Business Environment Notes
• Chapter 3 Business Organizations Notes
• Chapter 4 Government Policies for Business Growth Notes
• Chapter 5 Organizations Facilitating Business Notes
• Chapter 6 Common Business Terminologies Notes

CA Foundation BCK MCQ Questions Pdf | Business and Commercial Knowledge MCQs Pdf

Look into the below links that were provided multiple choice questions chapter-wise PDF for CA Foundation Business and Commercial (BCK). By preparing these you can score good marks in MCQ as it has more weightage too. All these MCQs are prepared with the reference of the official website.

• Chapter 1 Business and Commercial Knowledge: An Introduction MCQ
• Chapter 2 Business Environment MCQ
• Chapter 3 Business Organizations MCQ
• Chapter 4 Government Policies for Business Growth MCQ
• Chapter 5 Organizations Facilitating Business MCQ
• Chapter 6 Common Business Terminologies MCQ

Once after completing the preparation of the above chapters just check out this link below and take the test from the model question papers, that will help you to know how much more preparation is needed.

Link: BCK CA Foundation Question Paper

Business Correspondence and Reporting BCK CA Foundation Chapter Wise Weightage

CA Foundation Exam Applicants can check out this BCK CA question paper weightage that was given by the Institute of Chartered Accountants of India (ICAI). By looking at this weightage you can easily prepare for the exam. If we look into the below weightage 60 marks are for MCQ and that comes from the first 5 chapters. And other 40 marks are from the remaining chapters.

So prepare accordingly and score the highest marks.

Chapter Name	May 2018	November 2018	May 2019	November 2019	November 2020
CA Foundation Economics MCQ with Answers (60 Marks)
1. Nature and Scope of Economics	10	10	10	10	11
2. Theory of Demand and Supply	16	12	15	8	9
3. Theory of Production and Cost	19	5	8	20	11
4. Meaning and Type of Market	13	23	16	16	17
5. Business Cycles	2	10	11	12	12
CA Foundation BCK Book Pdf Business & Commercial Knowledge (40 Marks)
6. Introduction to Business and BCK	10	7	7	9	8
7. Business Environment	4	8	7	2	4
8. Business Organisation	9	5	7	2	5
9. Government Policies for Business Growth	4	5	7	5	7
10. Organizations Facilitating Business	6	5	6	2	6
11. Common Business Terminologies	7	10	7	14	10
Total Marks	100	100	100	100	100

How To Download CA Foundation BCK Study Material From Official Website

And as we all know ICAI website provides study material that can be downloaded easily and we can study well. Here we are going to show you the step-by-step process to download those BCK study materials easily.

• Firstly, open the ICAI official website link to download the study material.
• Next, on the top, you can see the student column, click on that and select “BOS knowledge portal”.
• Then, the students’ page will be opened, and “click on BOS KNowledge portal again”.
• After that, click on the “Study material”, that you can see on that page.
• Click on Foundation, and then select BEBCK and then again Select paper-4 BCK.
• Select Study material, then you can see chapter-wise links.
• Click on each link and study.

Best Books To Refer For Business and Commercial Knowledge

Here we are going to provide you with the best books to refer to for business and commercial knowledge to crack the exam 2023 is provided below.

• Common Business Terminologies  – CA Aakash
• Introduction to Business & BCK – CA Aakash
• Business Environment – CA Aakash
• Common Business Terminologies  – CA Aakash
• Organizations Facilitating Business – CA Aakash
• Government Policies  for Business Growth – CA Aakash

FAQs on BCK CA Foundation Study Material

1. Which study material is best for CA Foundation BCK preparation?

For the best preparation for the CA Foundation BCK exam, the study material provided by the ICAI is the best.

2. How to get CA Foundation BCK study material?

You can download the BCK study material from the official website. If you do not know how to download study material from the official website, you can check our website for steps.

3. Is the CA foundation BCK study material available for free?

Yes, CA foundation BCK Study materials are available on the official website or at gstguntur.com website for free of cost.

Key Takeaways

We are hoping that the information provided on CA Foundation BCK Notes has made your preparation easy and quick. As every lesson was explained clearly and deeply, that will help students to secure good marks in their exams. For more extra assistance you can comment below we will get in touch with you ASAP. Even share this article with your friends for guidance that will help them too.

Still, for other papers, and subjects, you can just check out our gstguntur.com website. Follow us blindly as we have taken references from the official website.

ICAI CA Foundation Economics Notes uses the revised syllabus. Students can prepare CA Foundation Business Economics Syllabus using Foundation CA Economics Notes Study Material to test their knowledge on the various topics. Download the chapter-wise Economics Foundation CA Study Notes PDF and start the exam preparation.

• ICAI CA Foundation Economics Study Material Notes
  • CA Foundation Economics Notes Pdf
  • CA Foundation Economics MCQ with Answers Pdf
• CA Foundation Economics Chapter Wise Weightage Syllabus
• CA Foundation Business Economics Preparation Tips
• FAQs on CA Foundation Economics Study Notes
  • How to prepare business economics for CA Foundation?
  • How do I get CA Foundation notes?
  • What is the weightage of business economics and BCK CA Foundation?
  • Which is the most scoring subject in CA Foundation?

ICAI CA Foundation Economics Study Material Notes | Business Economics CA Foundation Notes

CA Foundation Business Economics Study Notes Study Material includes complete information about the various topics and MCQ questions on it. The answers given here are easy to understand for all the students. All the concepts and sub-topics of the CA Foundation Economics Notes are taught on a deeper level to develop your conceptual understanding. Just click on the quick links available here to access the chapters.

The different chapters of the CA Foundation Business Economics paper are Nature and Scope of Business Economics, Theory of Production and Cost, Business Cycles, and Theory of Demand and Supply. Prepare all the chapters without fail using our notes and score the highest marks easily.

CA Foundation Economics Notes Pdf | ICAI CA Foundation Business Economics Chapter Wise Questions Pdf Download

• Chapter 1 Nature and Scope of Business Economics Notes
• Chapter 2 Theory of Demand and Supply Notes
• Chapter 3 Theory of Production and Cost Notes
• Chapter 4 Price Determination in Different Markets Notes
• Chapter 5 Business Cycles Notes

CA Foundation Economics MCQ with Answers Pdf | CA Foundation Business Economics MCQ Pdf

• Chapter 1 Nature and Scope of Business Economics MCQ
• Chapter 2 Theory of Demand and Supply MCQ
• Chapter 3 Theory of Production and Cost MCQ
• Chapter 4 Price Determination in Different Markets MCQ
• Chapter 5 Business Cycles MCQ

The effective CA Foundation Economics Question Paper PDF helps the students to score the best marks in the final exam. Along with the solved papers, refer to weightage, and more details in the following sections.

CA Foundation Economics Chapter Wise Weightage Syllabus

CA Foundation Economics Paper Weightage contains the Chapter-wise marking scheme in different question papers. It gives the detailed CA Foundation Study Material Economics Exam Pattern. Understand the topic-wise weightage and know the chapters that have the highest weightage.

Chapter Name	May 2018	November 2018	May 2019	November 2019	November 2020
CA Foundation Business Economics Book Pdf (60 Marks)
1. Nature and Scope of Economics	10	10	10	10	11
2. Theory of Demand and Supply	16	12	15	8	9
3. Theory of Production and Cost	19	5	8	20	11
4. Meaning and Type of Market	13	23	16	16	17
5. Business Cycles	2	10	11	12	12
Business & Commercial Knowledge (40 Marks)
6. Introduction to Business and BCK	10	7	7	9	8
7. Business Environment	4	8	7	2	4
8. Business Organisation	9	5	7	2	5
9. Government Policies for Business Growth	4	5	7	5	7
10. Organizations Facilitating Business	6	5	6	2	6
11. Common Business Terminologies	7	10	7	14	10
Total Marks	100	100	100	100	100

CA Foundation Business Economics Preparation Tips

It is not easy to crack the CA on the first attempt. Most people say that clearing the CA Foundation Papers is difficult. So, spend more time in preparation for the tough subjects. We have given a few essential tips that you can follow during the preparation.

• To get sufficient time, everyone is advised to prepare every day after completing the class.
• First, know the latest CA Foundation Economics Syllabus and exam pattern.
• Based on the topic weightage, make a preparation plan.
• Try to allot more time for the more marks concepts.
• The best preparation strategy helps you in achieving success.
• Try to take short breaks at regular time intervals for mind relaxation.
• Gather all the material through CA Foundation Economics Study Notes, and Study Material.
• After completing the preparation of every topic, go through the previous question papers.
• Refer to various books and material on the internet.
• Note down the important points for the last-minute preparation.
• Download the CA Foundation Business Economics Previous Year Question Papers.
• Begin your revision after preparing all the topics.
• Be confident and attend the exam with a piece of mind.

Do Refer

• CA Foundation Business Economics And Business And Commercial Knowledge Notes
• CA Foundation BCK MCQ Questions

FAQs on CA Foundation Economics Study Notes

1. How to prepare business economics for CA Foundation?

To prepare for the CA Foundation Business Economics exam follow these lines:

• First, prepare your basics.
• Try to make a perfect schedule that gives more time for the high-scoring topics.
• Prepare a lot.
• Evaluate yourself by taking mock tests and previous papers.
• Revise the topics days before the exam.
• Do the quick revision and attend the exam.

2. How do I get CA Foundation notes?

Students can get CA Foundation Notes for all the subjects at the gstguntur.com website.

3. What is the weightage of business economics and BCK CA Foundation?

The weightage of business economics is 60 marks and business and commercial knowledge is 40 marks.

4. Which is the most scoring subject in CA Foundation?

The most scoring subject in CA Foundation in accounts is Accounting or Business mathematics, statistics, and logical reasoning.

Final Words

Hoping that the data enclosed here about CA Foundation Economics Notes Study Material Syllabus is helpful for you to crack the exam. In addition to the study material get to know the syllabus, exam pattern, books, and preparation strategy. Bookmark our site to know more interesting updates on the CA exams.

CA Foundation Business Economics And Business And Commercial Knowledge Notes for all chapters are given here. Individuals who are preparing for the exams can refer to these unit-wise study notes of CA Foundation BCK and improve their skills. They can download ICAI CA Foundation Business Economics Study Notes PDF free of cost. Collect the unit-wise previous papers also to make your preparation effective.

As per the latest syllabus, CA Foundation Business Economics And Business & Commercial Knowledge Exam have both theoretical and MCQ questions. Students have to know the exam pattern, marking strategy, and topics to begin their preparation. So, here we have included all the needed information to score the best marks.

• CA Foundation Business Economics and Business and Commercial Knowledge Notes Study Material
• CA Foundation Business Economics Notes Study Material
  • CA Foundation Economics Notes Pdf
  • CA Foundation Economics MCQ with Answers Pdf
• CA Foundation BCK Notes Study Material
  • CA Foundation BCK Notes
  • CA Foundation BCK MCQ Questions Pdf
• CA Foundation Business Economics and Business and Commercial Knowledge Chapter Wise Weightage
• Key Points of CA Foundation Business Economics & Business & Commercial Knowledge Study Notes
• FAQs on CA Foundation BCK and Business Economics Notes
  • How do I get CA Foundation notes?
  • What are the chapters of business economics and business and commercial knowledge?
  • What is the importance of BCK for CA?
  • What are the 4 types of business economics?

CA Foundation Business Economics and Business and Commercial Knowledge Notes Study Material Syllabus

Business Economics and BCK Foundation CA Study Notes contain the sample multiple choice questions and theoretical questions. By referring to them, students will easily get a clear idea of what type of questions can be asked in the exam. Click on the below-mentioned links to download the chapter-wise CA Foundation Business Economics and Business and Commercial Knowledge Notes Study Material PDF.

As we already know that clearing the CA exam is not an easy task. Therefore, students are advised to prepare the fewer weightage concepts, as there is a possibility to ask those questions also in the exam. Gain conceptual knowledge by checking Business Economics and Business and Commercial Knowledge CA Foundation Notes and attend the exam with more confidence.

CA Foundation Business Economics Notes Study Material

ICAI CA Foundation Business Economics Study Material for different chapters is given here. Interested candidates can download CA Foundation Business Economics Notes Study Material for free by tapping the below-mentioned links. The chapter-wise Business Economics CA Foundation Study Material contains the sample questions and answers.

CA Foundation Economics Notes Pdf | ICAI CA Foundation Business Economics Chapter Wise Questions Pdf Download

• Chapter 1 Nature and Scope of Business Economics Notes
• Chapter 2 Theory of Demand and Supply Notes
• Chapter 3 Theory of Production and Cost Notes
• Chapter 4 Price Determination in Different Markets Notes
• Chapter 5 Business Cycles Notes

CA Foundation Economics MCQ with Answers Pdf | CA Foundation Business Economics MCQ Pdf

• Chapter 1 Nature and Scope of Business Economics MCQ
• Chapter 2 Theory of Demand and Supply MCQ
• Chapter 3 Theory of Production and Cost MCQ
• Chapter 4 Price Determination in Different Markets MCQ
• Chapter 5 Business Cycles MCQ

Download CA Foundation Economics Question Paper PDF and know what are the repeated questions in the exams. By solving the Business Economics previous papers, you can easily score the best marks in the exam.

CA Foundation BCK Notes Study Material

Find the quick links to get chapter-wise CA Foundation Business and Commercial Knowledge Questions, and MCQ Questions. After preparing all the topics, try to attend the mock tests for scoring the best marks in multiple choice questions. This CA Foundation BCK Notes MCQ Study Material helps in qualifying for the exam.

CA Foundation BCK Notes Pdf Study Material | CA Foundation BCK Chapter Wise Questions

• Chapter 1 Business and Commercial Knowledge: An Introduction Notes
• Chapter 2 Business Environment Notes
• Chapter 3 Business Organizations Notes
• Chapter 4 Government Policies for Business Growth Notes
• Chapter 5 Organizations Facilitating Business Notes
• Chapter 6 Common Business Terminologies Notes

CA Foundation BCK MCQ Questions Pdf | Business and Commercial Knowledge MCQs Pdf

• Chapter 1 Business and Commercial Knowledge: An Introduction MCQ
• Chapter 2 Business Environment MCQ
• Chapter 3 Business Organizations MCQ
• Chapter 4 Government Policies for Business Growth MCQ
• Chapter 5 Organizations Facilitating Business MCQ
• Chapter 6 Common Business Terminologies MCQ

BCK CA Foundation Question Paper PDF Download for free. Get the old question papers and study materials and study notes to score the highest marks.

CA Foundation Business Economics and Business and Commercial Knowledge Chapter Wise Weightage

Topic wise CA Foundation Economics and BCK Weightage are mentioned here. By observing the table, you can get a clear idea on what are the important topics. Give the highest priority to those important topics while preparing.

Chapter Name	May 2018	November 2018	May 2019	November 2019	November 2020
Business Economics (60 Marks)
1. Nature and Scope of Economics	10	10	10	10	11
2. Theory of Demand and Supply	16	12	15	8	9
3. Theory of Production and Cost	19	5	8	20	11
4. Meaning and Type of Market	13	23	16	16	17
5. Business Cycles	2	10	11	12	12
CA Foundation BCK Book Pdf Business & Commercial Knowledge (40 Marks)
6. Introduction to Business and BCK	10	7	7	9	8
7. Business Environment	4	8	7	2	4
8. Business Organisation	9	5	7	2	5
9. Government Policies for Business Growth	4	5	7	5	7
10. Organizations Facilitating Business	6	5	6	2	6
11. Common Business Terminologies	7	10	7	14	10
Total Marks	100	100	100	100	100

Do Refer

• CA Foundation Accounts Study Material
• CA Foundation Study Material

Key Points of CA Foundation Business Economics & Business & Commercial Knowledge Study Notes

The important points to be remembered while preparing for the CA Foundation BCK exam using the CA Foundation Business Economics And Business And Commercial Knowledge Notes are as given here:

• CA Foundation Business Economics & BCK Study Notes contains questions and answers for objective type and theoretical questions.
• Subject experts have prepared this BCK Foundation CA Study Material to help the exam-appearing students.
• You can download ICAI Foundation CA Business Economics and Business & Commercial Knowledge Study Notes Study Materials for free using the above links.
• CA Foundation Notes for Business & Commercial Knowledge and Business Economics is designed by experts as per the latest syllabus.

FAQs on CA Foundation BCK and Business Economics Notes

1. How do I get CA Foundation notes?

Students can download CA Foundation notes at gstguntur.com website for free.

2. What are the chapters of business economics and business and commercial knowledge?

The chapters of Business Economics and Business and Commercial Knowledge are Nature and Scope of Economics, Theory of Demand and Supply, Theory of Production and Cost, Meaning and Type of Market, Business Cycles, Introduction to Business and BCK, Business Environment, Business Organisation, Government Policies for Business Growth, Organizations Facilitating Business, and Common Business Terminologies.

3. What is the importance of BCK for CA?

Business and Commercial Knowledge (BCK) involves a large part of daily work for professionals like CAs. They have to give sound advice to their clients for increasing the profitability of their businesses.

4. What are the 4 types of business economics?

The 4 major types of business economics are sole proprietorship, partnership, corporation, and Limited Liability Company, or LLC.

Conclusion

We hope that the details given here regarding CA Foundation Business Economics And Business And Commercial Knowledge Notes PDF Download are useful for you. Along with the BCK study notes, you can also find the study material for both BCK and Business Economics papers. If you want to include any other data, let us know via the comment section. Get in touch with the site to know more related articles.

Download BCR CA Foundation Study Material PDF: Download BCR CA Foundation Study Material PDF: Provided chapter-wise study material links help the students to understand the important questions. All the answers are given as per the latest syllabus. Students can get the required knowledge by following the CA Foundation Business Correspondence and Reporting Study Notes.

Motivate yourself to improve your business skills by using Business Correspondence and Reporting Study. Download the Business Correspondence and Reporting CA Foundation Study Material PDF free of cost and prepare the topics.

• CA Foundation BCR Study Material
  • BCR CA Foundation Study Material Unit 1 Communication
  • CA Foundation Business Correspondence and Reporting Study Material Unit 2 Sentence Types & Word Power
• CA Foundation BCR Notes Pdf
  • CA Foundation Communication Notes Part 1 Communication
  • CA Foundation BCR Notes Pdf Part 2 Sentence Types and Word Power
  • BCR Notes CA Foundation Part 3 Comprehension Passages and Note Making
  • BCR CA Foundation Notes Part 4 Developing Writing Skills
• CA Foundation Business Correspondence and Reporting BCR Chapter Wise Weightage
• Features of CA Foundation BCR Study Material
• FAQs on Business Correspondence & Reporting Foundation CA Study Material
  • Which study material is best for CA Foundation?
  • Where to get study material for CA Foundation?
  • Which is the toughest subject in CA Foundation?
  • How to prepare for CA Foundation BCR Exam?

ICAI CA Foundation Business Correspondence and Reporting Study Material | CA Foundation BCR Study Material

BCR ICAI CA Foundation Study Material gives students unlimited practice and feedback. Individuals can easily understand the Business Correspondence and Reporting concepts by referring to the study notes. Look no further and use the best book for the preparation. Also, utilize the BCR CA Foundation Study Material, Notes, Previous Papers, and Chapterwise weightage for scoring the maximum marks.

BCR CA Foundation Study Material Unit 1 Communication

• Communication

CA Foundation Business Correspondence and Reporting Study Material Unit 2 Sentence Types & Word Power

• Sentence Types
• Vocabulary
• Comprehension Passage
• Note-Making
• Precis Writing
• Article Writing
• Report Writing
• Letter Writing
• E-Mail Writing
• Resume Writing
• Business Meeting

CA Foundation BCR Notes Pdf

CA Foundation BCR Study Notes PDF contains brief information about the concepts of BCR paper. By reading the Business Correspondence and Reporting notes, you will knowledge of the concepts. However, conceptual knowledge is important to attend to all the questions with 100% confidence on the exam. So, download CA Foundation BCR Notes Pdf for free and begin your preparation.

CA Foundation Communication Notes Part 1 Communication

• Nature, Process and Types of Communication Notes
• Barriers and Principles of Communication Notes

CA Foundation BCR Notes Pdf Part 2 Sentence Types and Word Power

• Sentence Types Notes
• Direct and Indirect Speech Notes
• Active and Passive Voice Notes
• Vocabulary Building Notes

BCR Notes CA Foundation Part 3 Comprehension Passages and Note Making

• Comprehension Passages Notes
• Note Making Notes

BCR CA Foundation Notes Part 4 Developing Writing Skills

• Basics of Writing Notes
• Precis Writing Notes
• Article Writing Notes
• Report Writing Notes
• Writing Formal Letters Notes
• Writing Formal E-Mails Notes
• Resume Writing Notes
• Business Meetings Notes

Not only does the CA Foundation Business Correspondence and Reporting study material, notes, and weightage help to score the best marks in the exam but also CA Foundation Business Correspondence and Reporting Question Paper is needed. Therefore, try to write answers for the BCR CA Foundation Old Papers whenever possible.

CA Foundation Business Correspondence and Reporting BCR Chapter Wise Weightage

Detailed chapter-wise BCR CA Foundation Paper Marking Scheme is provided here. It tells us the number of marks from each unit in different years. Based on this, you can estimate the CA Foundation BCR Units’ weightage and concentration. Try to prepare all the topics from the chapter that has the highest weightage so that you can score more marks in the exam.

Chapter Name	May 2018	November 2018	May 2019	November 2019	November 2020
Part A: Business Laws
Unit 1: Indian Contract Act, 1872
1. Nature of Contract	–	–	–	–	–
2. Offer & Acceptance	–	8	–	–	–
3. Capacity to Contract	2	–	–	–	–
4. Consideration	5	3	4	7	2
5. Free Consent	5	–	12	5	7
6. Legality of Object & Consideration	–	–	–	–	–
7. Void Agreements	2	–	–	–	9
8. Contingent & Quasi Contracts	–	7	–	4	–
9. Performance of a Contract	4	–	–	6	6
10. Discharge of a Contract	6	4	6	–	2
Unit 2: Sale of Goods Act, 1930
1. Formation of Contract of Sale	4	4	–	–	–
2. Conditions & Warranties	–	6	10	6	–
3. Transfer of Ownership	6	6	6	4	16
4. Unpaid Seller	6	–	–	6	–
Unit 3: Indian Partnership Act, 1932
1. General Nature of Partnership	4	–	–	–	2
2. Relations of Partners	6	14	14	14	12
3. Registration of a Firm & Dissolution of a Firm	6	4	4	4	4
Unit 4: Limited Liability Partnership Act, 2008
1. Limited Liability Partnership Act, 2008	5	5	5	5	5
Unit 5: Companies Act, 2013
1. Companies Act, 2013	13	13	13	13	13
Part B: CA Foundation BCR Study Material Business Correspondence & Reporting
Unit 1: Communication
1. Communication	10	10	10	10	10
Unit 2: Sentence Types & Word Power
2. Sentence Types	5	5	6	6	6
3. Vocabulary	7	7	7	7	7
4. Comprehension Passage	5	5	5	5	5
5. Note-Making	3	3	3	3	3
6. Precis Writing	7	7	7	7	7
7. Article Writing	5	–	5	5	5
8. Report Writing	–	5	5	5	5
9. Letter Writing	10	5		4	4
10. E-Mail Writing	–	–	4	–	–
11. Resume Writing	–	5	–	–	–
12. Business Meeting	–	–	–	–	–
Total marks greater than 100 (Compulsory + Optional Questions)	126	126	126	126	130

Features of CA Foundation BCR Study Material

Here we have provided some of the features of the BCR CA Foundation Study Material.

• CA Foundation Business Correspondence and Reporting Study Material are available online for free of cost.
• It contains the important questions with answers.
• By reading these BCR Foundation CA Study Material answers you can write as it is in the exam.
• The questions are collected from the CA foundation previous year’s question papers and answers are written by the subject experts.
• ICAI CA Foundation BCR Study Notes will support the students to understand the concepts.

Do Check

• CA Foundation Business Economics Notes
• CA Foundation Law Study Material

FAQs on Business Correspondence & Reporting Foundation CA Study Material

1. Which study material is best for CA Foundation?

Here given study material is best for CA Foundation. By following these BCR study material, students can score the highest marks in the exam easily.
2. Where to get study material for CA Foundation?

Students have to refer to the official website of ICAI to download the Study Material for CA Foundation.

3. Which is the toughest subject in CA Foundation?

Not all students feel the same subject as the tough. Based on their skills, the toughest subject may change. But, most people treat CA Foundation Paper 3 Business Mathematics, Logical Reasoning, and Statistics as the hardest subject.

4. How to prepare for CA Foundation BCR Exam?

Candidates who are preparing for the CA Foundation Exam can have a look at the best preparation plan.

• First, gather the CA Foundation BCR New Syllabus and weightage.
• By checking the unit-wise weightage, you can understand the topics that have high priority.
• Divide the topics based on your strengths and weaknesses.
• During the preparation, prepare all topics without fail.
• Take mock tests, practice previous papers,
• Revise all the topics using study materials.
• Be confident during the exam.

Final Words

We feel that our team has given you enough details about BCR CA Foundation Study Material and Notes. All this information is helpful for the students during the test preparation. If you need any extra assistance in your study time please let us know through the comment section. We will be honoured to help you in scoring good marks in the CA Foundation Exams. Do follow our site and share CA Foundation BCR Study Notes with your friends.