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Transfer of ownership in case of sale of unascertained goods

No property in the goods is transferred to the buyer, unless the goods are ascertained and appropriated. Until the goods are ascertained, there is merely an agreement to sell. In this case, the property in goods is transferred to the buyer on the fulfillment of the following conditions:

Ascertainment of goods

The term ‘ascertainment’ may be defined as the process by which the goods to be delivered under the contract are identified and set apart. Generally it is a unilateral act of the seller to identify and set the goods apart. It may be noted that the ownership is not transferred merely by the ascertainment of the goods. After ascertaining the goods, these must also be appropriated to the contract.

Appropriation of goods

The term ‘appropriation’ may be defined as the process which involve the selection of goods with the intention of using them in performance of the contract and it happns with the mutual consent of the seller as well as the buyer. It is a bilateral act of the seller and the buyer to identify and set the goods apart. It is always done with the mutual consent of both, the seller and the buyer. In other word appropriation can be done by the seller with the consent of the buyer or by the buyer with the consent of the seller. Appropriation must be unconditional i.e. without any condition. If there are some conditions attached to appropriation, then the buyer becomes the owner when these conditions are fulfilled.

 

Note: Once the goods are appropriated with the mutual consent of the parties, they become the property of the buyer if they have not been delivered and are in the custody of the seller as a bailee then any loss will be suffered by the buyer as he becomes the owner of the goods.

 
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