the circumstances to have been taken into consideration in the formation of the contract. For example, a seller of goods impliedly warrants that he has title to them and the authority to sell. A seller of provisions impliedly warrants that they are wholesome and fit for use.

145. Caveat emptor. This means, "Let the buyer beware." When a purchaser has an opportunity to examine the goods he must depend largely on his own judgment. It is his duty to observe the condition and quality of the article offered for sale and if he be in doubt demand an "express" warranty of the seller. If he fails to do this he buys at his own risk. For example, if A should sell a horse to B and B entered into the contract after careful examination of the animal, the fact that the horse became lame after being driven a few miles did not constitute a breach of warranty, since B relied upon his judgment as to the condition of the horse.

146. General warranty. A general warranty will not bind the seller of an article having an obvious defect, but a warranty of the defect although obvious will bind him. For example, if a horse is warranted to be sound and the buyer knows he has one blind eye, the warranty can not be considered as referring to the eye. On the other hand, the warranty of a casting in a machine having an apparent flaw would be binding as to that particular casting but not to the entire machine unless the warranty was so intended.

147. Mere expression of opinion. The law allows the seller a great deal of latitude in "puffing his goods." A mere statement of opinion or a prediction on the part of the seller is not a warranty. The seller may say that he believes the horse. offered for sale is sound or that he is considered sound. This would not constitute a warranty but a mere expression of opinion. To constitute an "express" warranty the statement must be one of fact concerning the goods which is meant to be relied upon, and which is relied upon.

148. Remedies for breach of warranty. When there has been a breach of warranty, it is often a question whether the buyer may rescind the sale and demand the return of his pur

chase price; or whether his remedy is merely an action for damages. This will depend very largely upon the kind of warranty. In case of "express" warranty some states allow the buyer to rescind the sale, that is return the goods and recover the price, or he may keep the goods and sue for breach of warranty. In other states a buyer to whom the title has passed can not rescind the sale for the breach of an "express" warranty. He must sue for damages for breach of the contract. The reason for this is that the contract of warranty is collateral to the main contract of sale, and its breach would not affect the contract.

149. Breach of implied warranty. For the breach of an implied warranty the buyer may either rescind the sale and recover the price or receive and keep the goods and sue for damages. In order to rescind, the buyer must act promptly and in a reasonable length of time. If the seller refuse to receive the goods upon a rescission of the contract the buyer may hold them as bailee for the seller. If the buyer has not paid the purchase price he may keep the goods and deduct the amount of damages from the price.

150. Rights of an unpaid seller against the goods. Although the title of the goods may have passed to the buyer, the unpaid seller has certain rights. First, if the seller is still in possession of the goods he has a lien on them or a right to retain them until the price is paid, unless he has sold them on credit and the term of credit has not expired. If the seller has a lien on the goods he may resell the goods in case the buyer delays an unreasonable time in paying for them. If the goods are perishable and the buyer is obliged to sell them at a sacrifice he may recover damages to the difference between the market price and the sacrifice price.

151. Seller's lien. The seller's lien exists when he has sold for cash down; or when, having sold on credit, the term of credit has expired before delivery; or when having sold on credit the buyer becomes insolvent before delivery. He loses his lien by delivery to the buyer or his agent, or through failing to reserve his right to the possession of the goods in the bill of lading.

152. Stoppage in transitu. This is an extension of the

seller's right to a lien on the goods for the payment of the pur

chase price.

Rule: As long as the goods are in the hands of the carrier and before delivery to the buyer, they may be stopped by the unpaid seller in case the buyer becomes insolvent.

Three conditions are necessary for the proper exercise of this right: one, there must be a balance due on the goods; two, the goods must be in the hands of an intermediate party as a common carrier or a warehouseman; three, the buyer must be in financial difficulty. To exercise this right the unpaid seller must give a reasonable notice to the carrier, in which he directs the carrier to hold the goods subject to his order. It is then the duty of the carrier to redeliver the goods to the seller and it is the duty of the seller to pay the transportation charges. If the carrier has issued a negotiable bill of lading this must be surrendered or a bond given in a sufficient amount to protect the carrier. If the negotiable bill of lading has been transferred by the buyer to an innocent holder for value while the goods are in the hands of the carrier and before the seller has exercised his right to stop the goods in transitu, his right to so stop them will be ended. The financial difficulty of the buyer need not amount to bankruptcy; a failure to pay his bills when due is sufficient. After the stoppage has been effected, the buyer has the right to tender the price or demand the goods.

153. Right of resale. The right of stoppage in transitu would often be of little value to the seller unless he had the right to resell the goods and hold the buyer liable for any deficit. If the goods sell for more than the price and charges against the goods the excess goes to the buyer, if the goods sell for less than the purchase value the buyer will be personally liable for the difference.

154. Rights of unpaid seller for breach of contract. Rule: The seller, in case of breach of contract on the part of the buyer, may maintain an action for the price of the goods where the title for the goods has already passed to the buyer.

If the goods have no ascertainable market value and the buyer refuses to accept them, the seller may tender them to the buyer

and upon his refusal to accept them, may hold them as the bailee of the buyer and bring an action for the price. If the buyer unreasonably refuses to accept the goods the seller may maintain an action against him for non-acceptance. The measure of damages is the loss to the seller. If there is an ascertainable market value the damages sustained will be the difference between the contract price and the market price.

155. Rights of the buyer. The buyer has a right to demand possession of the goods, providing he has complied with all precedent conditions. If the goods have been sold for cash he must make tender of payment before demanding the goods. If the property and the goods are passed to the buyer, and the seller wrongfully refuses to deliver the goods, the buyer may sue the seller for conversion (unauthorized ownership). If he desires to get actual possession of the goods he should bring action of replevin, or he may sue in tort for conversion and obtain the value of the goods in money.

156. The buyer may also maintain an action for breach of contract. If the goods have not passed to the buyer and the seller wrongfully refuses to deliver them, the buyer may maintain an action for breach of contract. If the goods have a market value, the measure of damages is usually the difference between the contract price and the market price at the time the goods were to have been delivered.

1. Define a sale.

QUESTIONS

2. Distinguish between a sale and a barter.

3. How does a sale differ from a gift?

4. In what respect does a sale differ from a bailment?

5. What is the nature of a contract of sale?

6. What is the rule in regard to goods not yet in existence as to the transfer of title?

7. What is the general rule as to the passing of title?

8. What is the rule where the contract is for the sale of specific goods? 9. How does the rule differ if the goods are not ready for delivery? 10. What is the rule where the buyer has an option to return the goods? 11. What is the rule where goods are sold on approval?

12. How can the seller deliver the goods and reserve the title in himself?

13. What is the general rule as to the passing of the title to unascer

tained goods?

14. What is the rule where unascertained goods are sold by description? 15. What is constructive delivery?

16. What is the rule where goods are delivered to a carrier?

17. Name the different kinds of bills of lading.

18. What kind of a bill of lading must a seller use in order to reserve the title in himself?

19. In the shipping of goods who must bear the risk of loss?

20. What is a chattel mortgage?

21. How does a chattel mortgage differ from a conditional sale?

22. Define warranty.

23. What is an express warranty?

24. Define implied warranty.

25. What is meant by "Caveat emptor?"

26. What is a general warranty?

27. How does a warranty differ from a mere expression of opinion?

28. What are the remedies in case of a breach of warranty?

29. What are the rights of an unpaid seller against the goods?

30. When does the seller have a lien against the goods?

31. What is meant by stoppage in transitu?

32. When must the right of stoppage in transitu be exercised?

33. What are the rights of an unpaid seller for breach of contract?

34. What right has the buyer when the seller refuses to deliver the goods?

CASES

1. A bought a stock of groceries of B in Chicago and had them shipped to Decatur. The invoices were marked "Terms Cash." When the goods arrived at Decatur they were seized by B's creditors. A brought a replevin suit to recover possession of the goods, claiming that the title had not passed to B. Can A recover?

2. A bought 200 bushels of corn from H and paid cash for it. The corn was in a crib containing 400 or 500 bushels. The agreement as to delivery was that after the corn became dry enough to keep well in bulk, H should deliver it to A. Two months later the sheriff levied on the corn in behalf of H's creditors and in spite of the levy H delivered the corn to A, claiming that the title had passed to A before the levy. Is H right in his contention that the title had passed to A?

3. A gave a chattel mortgage to B upon a crop of oats which A intended to plant in a field belonging to A. The mortgage was dated March 1st. The field was sown to oats in April. On June 6th, the sheriff levied on the growing oats in behalf of a judgment creditor. The judgment was obtained against A on May 1st. B claims the oats on the ground that the