# Reservation of the Right of Disposal in a Contract of Sale of Goods Reservation of the right of disposal is an important provision relating to the transfer of ownership in a contract of sale of goods. Under the Sale of Goods Act, 1930, the general rule is that ownership in goods passes from the seller to the buyer when the parties intend it to pass. However, the seller may reserve the right to dispose of the goods until certain conditions are fulfilled. In such a situation, even though the goods may have been delivered to the buyer or a carrier, the ownership does not pass to the buyer until the specified condition is satisfied. The expression “right of disposal” refers to the right of the seller to retain control over the ownership of the goods. When a seller reserves this right, the seller intends that the property in the goods should not pass to the buyer immediately. The transfer of ownership is postponed until the buyer fulfils a particular condition, most commonly the payment of the price. Section 25 of the Sale of Goods Act, 1930 deals with the reservation of the right of disposal. It provides that where there is a contract for the sale of specific goods or goods subsequently appropriated to the contract, the seller may reserve the right of disposal of the goods until certain conditions are fulfilled. In such a case, despite the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled. The reservation may be made expressly or may arise from the terms and circumstances of the transaction. An express reservation occurs when the seller clearly states in the contract, invoice, delivery document or other relevant document that ownership will remain with the seller until a particular condition is fulfilled. For example, a seller may deliver goods to a buyer but provide that ownership will remain with the seller until the full price has been paid. In this case, delivery alone does not transfer ownership. A common example is a sale where goods are sent by railway, transport company, shipping company or another carrier under a document of title. Suppose A agrees to sell 500 units of goods to B and sends the goods through a carrier. A instructs the carrier to deliver the goods to B only when B pays the price or accepts a bill of exchange. If A retains the document of title until the required condition is fulfilled, A has reserved the right of disposal. Therefore,