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Introduction
• Buying and selling of goods is the basis of commerce.
• Sales of Goods Act, 1930 is one of the fundamental laws regarding
business and covers all transactions related to the sale of goods
• Earlier it was covered under the Contract Act
• In 1930 a new law was enacted for special contracts covering buying
and selling of goods
• Transactions related to land and building are not covered under this
Act; they are covered under the Transfer of Property Act, 1882
Sale
• ‘Sale’ is a contract between the buyer and the seller, wherein seller agrees to transfer
the ownership of the goods to the buyer for a price
• In sale, if there is a default in payment, the seller can sue the buyer for the price of goods
• Certain things may not appear prima facie to be goods, but have been
declared as goods by the courts.
• Barter is valid contract but not valid as a contract of sale under the
Sale of Goods Act.
Important Differences
• Contract of work and labour Vs. Contract of the sale of goods
• Implied conditions:
• When there has been no communication of these during the transaction
• Even implied conditions give protection to the buyer
Types of Implied Conditions
• Condition as to title: Seller must have the title in goods - either own them or
have the authority to sell them
• Nemo dat quod non-habet, i.e., ‘one cannot give what one does not have’
• Condition as to sample
• The buyer expressly or impliedly makes known to the seller the intended purpose
• The buyer relies upon the seller’s skill and judgement with respect to the fitness of the
goods for the intended purpose
• The seller’s business is to supply such goods whether or not he/she is the manufacturer
or producer thereof
Types of Implied Conditions
Case: In Evens vs Stelle Benjamin, the plaintiff purchased a refrigerator from a seller
dealing in electrical appliances without asking the dealer whether it is fit to make
ice. The refrigerator failed to make ice. It was held that the buyer was entitled to
reject the refrigerator and get the refund of the price paid as the very purpose of
buying the article could not be fulfilled.
Condition Warranty
• Stipulation essential to the main • Only collateral or subsidiary to
purpose of the contract the main purpose of the contract
• If there is breach, aggrieved party • Aggrieved party can claim only
can repudiate the contract itself damages
and sue the seller for damage
• Main contract can be fulfilled
• It is of vital importance for
completion of contract even if warranty is not fulfilled
• Breach of condition can be treated • Breach of warranty cannot be
as breach of warranties treated as breach of condition