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Section 105: Sections 76 to 123 [Repealed by the Indian Sale of Goods Act, 1930]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Competent Court / Tribunal
Act 1872
Section 104 All 266 Sections of Indian Contract Act Section 106

Legal Commentary & Landmark Judgments: Section 105

Historical Section 105 of the Indian Contract Act, 1872 addressed the unpaid seller's power of resale upon the buyer's failure to pay within a reasonable time, as well as the title acquired by a bona fide purchaser where the original seller was in possession under a voidable contract. Transposed into Sections 29 and 54(2) of the Sale of Goods Act, 1930, this provision balances the seller's right of commercial liquidation against buyer protection.

  • Pre-condition of Reasonable Notice: To exercise a statutory resale and recover the deficiency from the defaulting buyer, the seller must give notice of intention to resell, affording the buyer a final opportunity to redeem.
  • Exemption for Perishable Goods: Where the goods are perishable, the unpaid seller may proceed to resell immediately without prior notice, mitigating spoilage losses.
  • Title Conferred Under Voidable Title: Provided that a person in possession of goods under a voidable contract (e.g. obtained by fraud or coercion) can pass good title to a bona fide purchaser for value before the contract has been rescinded.
Key Landmark Precedents:
  • Phillips v. Brooks Ltd. [1919] 2 KB 243: Classic authority on voidable title holding that where a rogue obtains goods by fraudulent misrepresentation under a voidable contract, a subsequent bona fide purchaser acquires valid title before the contract is avoided by the original seller.
  • Central National Bank Ltd. v. United Industrial Bank Ltd. AIR 1954 SC 181: The Supreme Court held that where possession of an instrument or property is obtained under a contract voidable for fraud, a bona fide transferee for value without notice before rescission acquires unassailable title.
Courtroom Practice & Strategic Litigation Guidance:

If a supplier resells goods without giving statutory notice under Section 54(2), he loses the right to recover any deficiency on resale and must account to the defaulting buyer for any profit made. Always establish service of formal written notice of resale with proof of delivery before proceeding to auction or private sale.

Section 104 All 266 Sections of Indian Contract Act Section 106