Submitted by:

Amar premjit bilung Sailrit pattnik Shivam goel Vishwanathan

Introduction
According to Section 4(1) a contract of sale of goods is

a contract whereby the seller transfer or agrees to transfer the property in goods to the buyer for a certain price

Explanation
A contract of sale can be absolute or conditional.
According to Section 4(3) when to right of

ownership of the goods is transferred from the seller to the buyer under a contract, the transaction is called a Sale. When the transfer of ownership is to be made at some future date , or is to made on the fulfillment of some condition , the contract is called Agreement to Sell.

Characteristics
Buyer & Seller:- The person who buys the goods or makes

an agreement to buy is called the buyer. & the person who sells goods or makes an agreement to sell is called the seller. Goods:- The subject-matter of the contract of the sale is essential that the goods, are moveable property other than actionable claims & money. Transfer of immovable property is not regulated by the sale of goods act. Price:- Goods are always sold for a price. Transfer of ownership:- The transfer of ownership can be at the time of making the contract or it can be at a future date.

Diff. b/w Sale & Agreement of sell

Basic of difference
Transfer of ownership

Sale
The ownership of goods is transferred to the buyer at the time of contract

Agreement of sell
The ownership of goods is not transferred at the time of contract but later

Right of usage

The buyer has the right to use the good he buys

It is only a contract b/w the buyer, it is done only when the good is transferred

Consequence of breach

The seller can sue the buyer for payment

Seller can only sue for damage

Basic of difference
Types of goods

Sale
Occur in case of existing and specific goods only

Agreement of sell
Mostly in case of future and contingent goods

Right to re-sell

Seller cannot re-sell the goods

The original buyer who take the goods for consideration can sue the seller for damage

Risk of loss

Any loss against the goods is bear by buyer

Any loss against the goods is bear by seller

Hire purchase agreement

It is a contract where the owner of the goods lets them

on hire to another person called hirer or hire purchaser Rent is paid in installment and upon an agreement that at certain number of installments the property in goods will be passed to the hirer The hirer may return the goods at any time without any obligation to ay the balance rent It is not a contract of sale but only a bailment and the property in goods will remain with the owner during the continuance of the bailment

Example
B hires a piano from H on an agreement that B should

pay Rs. 2000 a month as rent. The stipulation is that if he regularly pays the rent for 36 months the piano becomes his property at the end of 36 months. Further it s provided that B can return the piano at any time and he need not pay any more. If it is agreed that 36 months rent must be paid and that he cannot return the piano, the agreement is a contract of sale.

Difference b/w Sale and Hire-purchase agreement

Sale
Transfer of ownership from seller to buyer as soon as contract is made.

Hire purchase agreement

Transfer of ownership occurs only when certain agreed number of installment is paid.

The position of the buyer is that of the owner.

The buyer cannot terminate the contract and as such is bound to pay the price of the goods.

The position of the hire-purchaser is that of the bailee.

He has the option to terminate the contract at any stage, and cannot be forced to pay the further installment.

The installment paid by the buyer is referred The installment paid are regarded as hire as the price of the goods. charge and not as payment towards the price of the goods till option to purchase the goods is exercised.

Contract of Sale Vs. Other Contract :

Sale Vs. Barter:- when goods are exchanged for goods is know

as barter deal. A sale implies reimbursement for goods sold in terms of money, so in this case barter deal is not a sale.

Sale Vs. Gift:- in case of gift, the transfer of ownership does not involve any kind of expense. Sale Vs. Bailment:- the buyer acquires the possession of goods from the seller in return for a consideration in money & becomes the lawful owner of the goods, but in bailment one person is the bailor who give the possession of goods to another for a specific objective, after fulfill of the objective the bailee is bound to return the good back to bailor

Sale and contract for work and materials

The sale of goods act applies to a contract of sale and

not to a contract for work and materials. A contract of sale contemplates the delivery of goods whereas a contract for work and material involves exercise of skill and labour by one party in respect of materials supplied by another, the delivery of goods being only subsidiary.

Example
A dentist agreed to supply a set of artificial teeth to a

patient. The material was wholly found by the dentist thus the contract was for the sale of goods. A contract involved the repair of a car and the supply of parts for the purpose. Held ,it was a contract for work and materials.

Subject matter of contract of sale

Goods: according to sec. 2(7) goods means every kind

of movable property. It also includes stocks and shares, growing crops, part of land which is agreed to be served before sale. Trade marks, copyrights, patent rights, goodwill, electricity, water, gas are all goods. Actionable claims and money are not goods. Eg; claim to any debt, beneficial interest in movable property not in possession.

Types of goods
Existing goods Future goods
Specific goods Generic goods

GOODS

Contingent goods

 Existing goods:- These are those goods that are

owned by seller at the time of making the contract. Specific Goods:- these are those goods which are identified by both parties. Generic Goods:- existing goods that have not been specifically identified by the parties. Future goods:- goods that are not in possession of the seller at the time of the contract. Contingent goods:- these are same future goods, the acquisition of which by the seller is dependent on a contingency which may or may not happen

References
Business regulatory framework by Dr. Ashok Sharma

Elements of mercantile law by N.D. Kapoor

THANK YOU