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Business Law Sales Of Goods Act, 1930

Prof : Dr. Devnani



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SR.NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Introduction Elements Of A Sale, Sale Contract And Goods Kind of goods Transfer of property Sale and agreement to sale Subject matter of contract of sale-Goods Perishing of goods Effect of perishing of goods Price Time Condition and Warranty Rules of Delivery Auction Sale Case Studies Conclusion Bibliography Topic Page No. 5 6 7 8 9 10 11 12 13 15 16 17 18 19 20 21

Group Members




1 2 3 4 5

Poonam Dalvi Rajesh Vishwanath Tendulkar (Group Leader) Tiwari Urmila Yadav

MI-10-03 MI-10-11 MI-10-14 MI-10-15 MI-10-16


Introduction The act came into force on 15th March 1930 in replacement of the chapter 7 of the Contract Act which deals with sale of goods. The Sale of Goods Act, 1930 governs the contracts relating to sale of goods. It applies to the whole of India except the State of Jammu & Kashmir. The contacts for sale of goods are subject to the general principles of the law relating to contracts i.e. the Indian Contact Act. A contract for sale of goods has, however, certain peculiar features such as, transfer of ownership of the goods, delivery of goods rights and duties of the buyer and seller, remedies for breach of contract, conditions and warranties implied under a contract for sale of goods, etc. These peculiarities are the subject matter of the provisions of the Sale of Goods Act, 1930.

Elements Of A Sale, Sale Contract And Goods 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. It thus includes both an actual 'sale' and an 'agreement to sell', which has been distinguished later. 'Goods' means every kind of movable property other than actionable claims and money; and includes stocks and shares, growing crops, grass and things attached to or forming part of the land, which are agreed to be served from land before sale, or under for contract of sale. A sale' must be distinguished from an 'agreement to sell' since the legal implications of the two terms are vastly different. A contract wherein, the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of property in the goods is to take place at a future time, or subject to some conditions, thereafter to be fulfilled, it is called an agreement to sell. An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.

Kind of goods Existing goods- Sec.6(1) these are the goods which are in existence and are physically present in the sellers possession. They are further classified as Specific goods- 2(14) these are the goods identified and agreed upon at the time the contract is made. Ascertained goods- these are identified after the formation of the contract. Unascertained goods- these are the goods which are not specifically identified or agreed upon at the time of the contract of sale. Future goods -sec.2(6) and Contingent goods 6(2)

Transfer of property Transfer of property means transfer of ownership. Mere transfer of possession cannot be termed as a sale. Sec.2(11) Property means general property in goods and not merely a property in goods and not merely a special property. General property means all ownership rights and special ownership rights and special property means limited rights.

Sale and agreement to sale When property is transferred from seller to buyer at the time of formation of contract, an absolute sale occurs. When property in the goods is to be transferred at some future date and not at the time of contract, the contract of sale is termed as anagreement to sell.

Subject matter of contract of sale-Goods. Goods may be classified as :Existing Goods- a) specific goods, b) ascertained goods, c) unascertained goods. Future goods- which do not exist with the seller at the time of sale. the contract thus is an agreement to sell. Contingent goods a type of future goods, the acquisition of which depends upon a contingency which may or may not happen.


Perishing of goods The possible causes of perishing of goods:1. Physical destruction of goods. 2. Damage of goods in such a manner that they loose their commercial value. 3. Loss of goods by theft. Lawful acquisition of goods by government.


Effect of perishing of goods Goods perishing before formation of the contract.- in case of specific goods such contract is void as the performance of the contract is impossible due to destruction of subject matter. Goods perishing before the sale but after the agreement to sell.:- in case of specific goods the contract of sale becomes void and both parties are excused from the performance. (Sec.8) Effect of perishing of future goods.:- Sec.8 applies in this case also which says where there is an agreement to sell specific goods, and subsequently the goods without any fault on the part of the seller or buyer perish or become so damaged as no longer to answer to their description in the agreement before the risk passes to the buyer, the agreement is thereby avoided.


Price S2(10) defines the price as the money consideration for the sale of goods.  Price has to be in terms of money

Fixing the price  Price is mentioned in the contract.  The manner of fixing the price is mentioned in the contract.  It is determined by the course of dealings of the parties. When price is not fixed by any of the above modes as reasonable price is considered as the price of the contract.


Price consideration The consideration for the contract of sale must be money. If goods are exchanged against goods the transaction is barter and not covered by the act. However consideration may be partly in money and partly in goods. NO SPECIAL FORMALITIES ARE REQUIRED FOR CONTRACT OF SALE. IT MAY BE IN WRITING OR ORAL OR IMPLIED.


Time  When time is stipulated regarding the payment of price :- Time of payment is not considered the essence of the contract unless unless a different intention appears from the terms the contract. Thus if payment is not made in time the seller can not avoid the contract but can claim damages.  When time is stipulated regarding delivery of goods:- time of delivery of goods is normally considered essence of the contract. Thus non performance at stipulated time will render the contract voidable at the option of the buyer.


Condition and Warranty Condition Warranty Its is a term in contract which is essential. When condition breaches? Breach of condition can be breach of warranty Its a term in contract which is collateral. When warranty breaches? Breach of warranty cannot be breach of condition.


Rules of Delivery Mode of delivery Delivery and payment on current condition Effects of part delivery Buyer to apply for delivery Place of delivery , Time of delivery , Goods in possession of a third party Cost of delivery. Delivery of wrong quantity Installment deliveries


Auction Sale By auction is a public sale where different intending buyers try to outbid each other. The goods are ultimately sold to the highest bidder. The auctioneer who sells the goods by the auction is an agent of the seller, i.e. the owner.


Case Studies  Indian Steel and Wire Products Ltd. (Appellant) v. State of Madras ( Respondent) AIR 1968 SC 478 State of Madras (Respondent) AIR 1968 Supreme Court 478  Orissa Textile Mills Ltd. and Another ( Petitioners) V. Ganesh Das Ramkishun ( Opposite Party) AIR 1961 PAT 107  P.S.N.S Ambalavana Chettiar & Co. Ltd. and another ( In both the Appeals), Appellants V. Express Nespapers Ltd. Bombay ( In both the Appeals), Respondent. AIR 1968 SC 741  Union of India, (Appellant) V. A.L Ralliaram (Respondent) AIR 1963 SC 1685



This section is devoted to certain aspects of the contractual formation process that merit attention in a specialist sale of goods text. No attempt will be made to dispose of matters that had best be left to the general contract texts. Mention will be made here of formalities; of special statutory provision for abuses and potential abuses in the process of concluding a sale of goods contract; and of offer and acceptance, contractual capacity and certainty, to the extent that they are dealt with specifically in the Sale of Goods Act.



BOOKS: Business Law