Meaning Of Transfer of Ownership

In the Sale of Goods Act, the word property is used for the ‘ownership’. When the goods are sold, it is the property in the goods which is transferred to the buyer. The term ‘property in the goods’ should not be confused with the physical ‘possession of goods. A person may be in possession of goods but he may not be the owner of those goods. 

For example, an agent, or servant or a bailee may be in possession of goods, but is not the owner because the properly in the goods does not vest in him, he is holding the goods for his principal, master or the bailor. Similarly, a person may be the owner of the goods but he may not be in possession of goods, for example, the principal, master or bailor, may not be in possession of the goods but the property in goods vests in him. Thus, the transfer of possession of goods is not the same thing as the transfer of ownership. You will notice that the, ownership of the goads may pass with or without the transfer of possession.

In a contract of sale of goods when the goods are sold to the buyer, the buyer becomes the owner of the goods irrespective of the fact whether the buyer has taken the delivery of goods or not. Thus, it should be clear to you that transfer of property or ownership means the legal ownership and not the physical possession of goods.

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