Whether E- sale can be done by first buyer in ex-works cases

[Ramaiah Swamy]

Good evening all,

In  a case of sale on ex-work basis,  whether the first buyer can make E - sale to its customer ( called second buyer ) and whether the said customer can make further E - 2 sales to further customer ( called third buyer ?

In the present case, the fist buyer arranges its transport for lifting the material from seller's factory.

Seller is in chennai, first buyer is in maharastra and second buyer is also in maharastra

As per contract, first buyer should lift the  materials from the seller's factory.  Since the materials is taken by first buyer from the seller's factory, whether it can be said that first buyer has taken delivery , therefore th first buyer  can not make  E - sale. It is only the second buyer who can make first E - 1 sale in the present case.

Netizens' views are requested

Thanks and regards

Ramaiah swamy

[S S KONAR]

Good Morning,

I have the same opinion of Mr Swami. However in case the transportation documents are prepared in the name of the second buyer on the instruction of the the first buyer, in that case it will be considered as E1 sale in the first instance considering the first buyer's instruction as his endoresment.

Thanks & Best Regards

S S Konar, Kolkata

 

 



AI Summary

E-sale invalid when first buyer takes delivery in ex-works, unless transport documents name downstream buyer on instruction. A first buyer under an ex-works contract cannot normally effect an E-sale if the first buyer arranges transport and takes delivery at the seller's premises, because taking delivery prevents treating the transaction as an electronic downstream sale; however, if transport documents are prepared in the downstream buyer's name on the first buyer's instruction, that instruction can be treated as an endorsement and the movement may be characterised as an E1 sale by the first buyer.