Unit 2: Partnership Act & Sale of Goods Act

A partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all (Section 4).

• Admission: a new partner joins only with the consent of all partners; not liable for acts before admission.
• Retirement: with consent, by agreement or by notice in a partnership at will; the retiring partner remains liable to third parties until public notice is given.
• Death: usually dissolves the firm unless the agreement provides otherwise; the deceased partner's estate is not liable for acts after death.

Dissolution of the firm: by agreement, compulsory (insolvency, business becoming illegal), on contingencies (expiry of term, death), by notice (partnership at will) or by the court (insanity, misconduct, persistent breach, losses).

A contract of sale is one where the seller transfers or agrees to transfer property in goods to the buyer for a price (Section 4). Essentials: two parties, goods (movable property), price in money, transfer of property, and all essentials of a valid contract.

A condition is a stipulation essential to the main purpose — breach allows the buyer to reject the goods. A warranty is collateral — breach allows only damages.

Caveat emptor (let the buyer beware) is the general rule, with exceptions for fitness for purpose, merchantability, sale by description, trade usage and fraud.

Property passes when the parties intend: for specific goods in a deliverable state, at the time of contract; for unascertained goods, when they are ascertained and appropriated to the contract. Risk passes with property unless agreed otherwise. An unpaid seller (Section 45) has rights against the goods — lien (retain possession), stoppage in transit (when the buyer is insolvent) and resale — and rights against the buyer — suit for the price, damages for non-acceptance, and interest.