Originally, the law relating to the sale of goods or movables

was contained in the chapter VII of the Indian Contract

Act,1872.
The act embodied the simple and elementary rules relating to
the sale of goods.
The developments of modern business relations found the
Indian Contract Act inadequate to deal with the new
regulations
Subsequently the provisions relating to the sale of goods
contained in the Indian Contract Act,1872 was repealed and
re-enacted by the Sale of Goods Act,1930.
The Act came into force on the 1st day of July,1930.It extends
to the whole of India except Jammu and Kashmir.
 This Act lays down special provisions
governing the contract of sale of goods. The
general law of contract is also applicable to
contracts for the sale of goods unless they are
inconsistent with the express provisions of
the Sale of Goods Act.
Section 2 of the Sale of Goods Act, 1930

defines the terms which have been frequently

used in the Act, which are as follows
 Seller: Person who sells or agrees to sell.
Buyer: Person who buys or agrees to buy.
Goods: Every kind of movable property
other than actionable claims and money; and
includes stock and shares, growing crops,
grass, and things attached to or forming part
of the land, which are agreed to be severed
before sale or under the contract of sale;
[Sub Section (7)].
Sale: Where under a contract of sale the
property in the goods is transferred from the
seller to the buyer, the contract is called a
sale.
 Agreement to sale: Where the
transfer of the property in the goods is
to take place at a future time or subject
to some condition thereafter to be
fulfilled, the contract is called an
agreement to sell.
Price : Consideration for the sale of
goods in money. (When the
consideration is only in goods then it is
barter and not sale.)
Transfer : Transfer of ownership of
goods or agreement to that effect.
A contract of sale of goods is a contract whereby the
seller transfers or agrees to transfer the property in
goods to the buyer for a price.
There may be a contract of sale between one part-owner
and another
 Salient Features of contract of sale
Features Explanation
Two parties There must by two parties, buyer and
seller, to contract.
Movable goods Any goods that are movable and the
ownership is transferred. (Immovable
property does not come under the Sales
of Goods Act.)
Price Sale is about exchange goods for money.
Under Contract Act it is termed as
consideration, but this consideration
must
be only in money. Exchange of goods for
goods is barter and not sale
Transfer of general Property is distinguished as general
property property and special property. General
property consists of as goods owned and
special property as goods under
possession.
Valid contract The principles of valid contract are
applicable to sale of contract.
Sale

Agreement to sell

Hire purchase

Bailment

Contract of work
DEFINITION:
The subject matter of a contract of a sale must be goods .According
to Section 2(7) the term goods means every kind of movable
property other than actionable claims and money and includes
stock and shares , growing crops , and things attached to or forming
part of the land which are agreed to be severed before sale or under
the contract of sale
TYPES OF GOODS Specific

Exiting goods
Ascertained

GOODS Future goods

Unascertained
Contingent goods
 1. Existing goods: These are the goods which are owned or
possessed by the seller at the time of sale. Only existing goods can
be the subject of a sale. The existing goods may be-
a) Specific goods: Goods identified and agreed upon at the time of making
of the contract of sale of goods.
b) Ascertained goods: Goods identified subsequent to the formation of the
contract of sale. The terms ascertained and specific, are commonly used
for same kind of goods.
c) Unascertained or generic goods: Goods not identified or agreed upon at
the time of making of the contract of sale. They are the goods defined
for description only.
2. Future goods: Goods to be manufactured, produced or acquired
after making of the contract are called future goods.
3. Contingent goods : Goods, the acquisition of which by the seller
,depends upon an uncertain contingency are called contingent
goods. They are also a type of future goods.
 The goods which form the subject of a contract of sale may be either
existing goods, owned or possessed by the seller or future goods
There may be a contract for the sale of goods the acquisition of which
by the seller depends upon a contingency which may or may not
happen
Where by a contract of sale the seller purports to effect a present sale
of future goods, the contract operates as an agreement to sell the
goods
EFFECTS OF DESTRUCTION OF GOODS
Goods perishing before the contract
In the case of a contract for the sale of specific goods, that have been
damaged or perished without the knowledge of the seller the contract
is null and void. The reason for this being impossibility of
performance. The subject matter of the contract is perished or no
more there; the contract cannot be carried out.
CRITERIA
(a) Specific or ascertained goods.
(b) Goods must have perished before the contract is made.
(c) The seller has no knowledge of the perished goods at the time of
contract

GOODS PERISHING AFTER THE CONTRACT BUT BEFORE THE

SALE
In an agreement to sell specific goods, if subsequently the goods perish
without the fault of the seller and before the ownership of the goods is
transferred, the agreement is void. If the ownership or the title is already
passed to the buyer then it becomes his liability.

CRITERIA
(a) It must be an agreement to sell and not actual sale.
(b) Goods must be specific.
(c) Goods must have been damaged or perished beyond the recognition of
the contract.
(d) The destruction must take place without the fault of either party.
 Money consideration for a
sale of goods
Forms an essential part of the
contract
Must be expressed in terms of
money
Not essential to be fixed at
time of sale
Must ,however , be payable if
not fixed
Price in a contract of sale may be
Fixed by the contract itself
Left to be fixed in an agreed manner
Determined by the course of dealing
between the parties [Sec 9(1)]
In absence of the above , the buyer must
pay to seller a reasonable price
 A stipulation in a contract of
sale with reference to goods
which are the subject thereof
may be a condition or a
warranty Stipulations
Prerequisite or provision or a
qualification attached to a
contract
Condition in law is a Conditions Warranties
qualifying clause
Warranty is an assurance or
guarantee in a contract to
fulfill the obligations of sales
of goods
 Buyer Beware
Practical skill and judgment of buyer in his
choice of goods of purchase
Exemptions
Fitness of Buyers purpose
Trade or patent name
Merchantable quality
Usage of trade
Consent by fraud
 Advertisement of auction.
Printed catalogue of the lot of articles for auction
Initiation

At the appointment time and place. The bidders

assemble.
Act The auctioneer deftly performs his duty
to take bids on the offered lots.

The highest bid is accepted.

The ceremonial closureby the fall of hammer or the
count of 1,2,3, or going, going, gone, etc.,
Completion complete the sale contract.
 Goods must be ascertained Where there is a contract for
the sale of unascertained goods, no property in the
goods is transferred to the buyer unless and until the
goods are sanctioned. Property passes when intended to
pass. (1) Where there is a contract for the sale of specific
or ascertained goods, the property in them is
transferred to the buyer at such time as the parties to
the contract intend it to be transferred.
Secs 18 and 19(1),The Sale of Goods Act, 1930
Secs 1830 of the Sale of Goods Act deal with effects of
contract.
The essence of the effect of sale of goods contract is
transfer of property
Some basic concepts
Proprietary rights -The property rights
pass from the seller to the buyer
Property in goods- The ownership of
goods.
Possession of goods- The physical custody
or control of goods.
 Ownership
The ownership passes from the seller to the buyer, with
all the rights thereof
Risk
Once the ownership passes from seller to the buyer, so
too does the risk
Action against third parties
The third parties involved in the delivery of goods are
liable for action from the owner
Suit for price
The seller can sue the buyer for price
Insolvency
The official receiver or assignee takes over the goods
Two things are essential for transfer of property

a) Goods must be ascertained

a) Intention to pass the property in goods

Intentions
Ascertained to pass Transfer of
Goods property in Property
goods
 Specific goods Secs 2022
Sale of goods on approval
Sale of unascertained goods
Appropriation
Reservation of right of disposal
Transfer of title to goods
 It
is the duty of the seller to deliver
the goods and of the buyer to accept
and pay for them, in accordance
with the terms of the contract of
sale.
Sec. 31, The Sale of Goods Act, 1930
simple transaction
If something complex then it is mentioned
in in the contract as special terms
 Seller:Delivers goods and receives
consideration.
Buyer :Accepts and pays for the goods.
Terms :Contract can have terms of
delivery and payment
Delivery of goods: voluntary transfer of
the possession of goods.
 Buyer to apply for delivery
Sellers duty to deliver
Time of delivery
Cost of delivery
Delivery in instalments
 Actual
delivery

Delivery of
Symbolic
goods delivery

Construc
tive
delivery
Rights and Duties of the Buyer:
Where goods are delivered to the
buyer, which he has not previously
examined, he is not deemed to have
accepted them unless and until he
has a reasonable opportunity of
examining them for the purpose of
ascertaining whether they are in
conformity with the contract.
Sec. 41, The Sale of Goods Act, 1930
 The acceptance or rejection by the buyer
creates certain rights and duties.
The law protects the buyer in terms of his
rights to examine the goods and at the same
time obliges him to be a responsible buyer by
limiting him to certain liabilities when he
rejects the goods
Other issues:
What seller will do if goods not accepted.
If goods are transported at distant places.
The seller of goods is deemed to be an
unpaid seller within the meaning of this
Act(a) When the whole of the price has not
been paid or tendered. (b) When a bill of
exchange or other negotiable instrument has
been received as conditional payment, and
the conditions on which it was received has
not been fulfilled by reason of the dishonour
of the instrument or otherwise.
Sec.45(1),TheSaleofGoodsAct,1930
 Unpaid seller A person who has sold
the goods for a price but price has not been
paid to him
In possession of Parted with the
goods goods

Right of lien Stoppage in transit

Right to withhold Resale

delivery

Stoppage in
transit
Where there is a breach of warranty by the
seller, or where the buyer elects or is compelled
to treat any breach of a condition on the part of
the seller as a breach of warranty, the buyer is
not by reason only of such breach of warranty
entitled to reject the goods; but he may(a) Set
up against the seller the breach of warranty in
diminution or extinction of the price; or (b) Sue
the seller for damages for breach of warranty.
Sec.59,TheSaleofGoodsAct,1930
I. Suit For Price
II. Damages For Non
Acceptance
III. Interest by way of special
damages
IV. Repudiation of contract
I. Damages for non-delivery of the
goods
II. Specific performance
III. Breach of warranty
IV. Interest by way of special
damages
IV. Repudiation of contract before
Due date