Significance of transfer of property in goods

Property in goods means ownership of the goods. It is different from possession of the goods. Possession refers to the custody of the goods. There may be situations where a person may be the owner of certain goods but not in possession of the same (or) vice-versa.

The time of transfer of ownership of goods decides various rights and liabilities of the seller and the buyer:-

a) It is the owner who has to bear the risk and not the person who merely has the possession.

b) It is the owner who can take action against the third party and not the person who merely has the possession.

c) The seller can sue for the price only if the ownership of goods has been transferred to the buyer.

d) In case of insolvency of the buyer, the official receiver (or) assignee can take the possession of goods from the seller only if the ownership of goods has been transferred to the buyer.

e) In case of insolvency of the seller, the official receiver (or) assignee can take the possession of goods from the buyer only if the ownership of goods has not been transferred to the buyer.