SALE OF GOODS ACT
Group Members : Rohit Dhoundiyal
Sale of Goods Act came into force on 1st July, 1930.
Initially was a part of Indian Contract Act, but later these
sections were deleted.
Sale of Goods Act is complementary to Indian Contract Act.
requirements of Contract Act i.e. offer &
acceptance, mutual consent, competent parties, free consent
etc; apply to Contract of Sale of Goods Act.
The scope of this Act is only a regards movables other than
actionable claims and money.
IMPORTANT LEGAL TERMS
U/S – 2(1) Buyer is :
“ A person who buys or agrees to buy ”.
U/S – 2(13) Seller is :
“ A person who sells or agrees to sell ”.
U/S – 2(7) Goods as :
“ Every kind of moveable property other than
actionable claim and money; and includes stocks &
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 ”.
CONTRACT OF SALE
U/S – 4(1)
“Contract of sale is a contract whereby, a seller
transfers or agrees to transfer the property or goods to the
buyer for a price”.
ESSENTIALS OF A CONTRACT OF SALE
AGREEMENT OF SALE
U/S – 4(3) Agreement of Sale states :
“Where under a contract of sale the property in the
goods is to take place at a future time or subject to some
conditions thereafter to be fulfilled, the contract is called
an agreement to sell”.
AGREEMENT TO SELL
As specified before
As specified before
Future time or subject to fulfilment
of some conditions
Type of contract
Transfer of Risk
Right of seller
Seller can sue the buyer for the
price, even though the goods are
in his possession
Seller can sue the buyer for damages
even though the goods are in the
possession of the buyer
Right of buyer‟s
Can sue the seller for the
damages and can sue the 3rd
party who bought those goods
Buyer can sue the seller for the
U/S – 12(2) Condition is :
“A stipulation essential to the main purpose of the
contract, the breach of which gives rise to a treat the contract
Hence, from the definition it is clear that condition is an
representation forming the core of the contract. And if it is not
true, the buyer can terminate the contract.
E.g. „A‟ buys from „B‟, a hair oil advertised as a pure coconut
oil. The oil turns out to be mixed with herbs. „A‟ can return the
oil and claim the refund price
as to title
as to sample
as to quality
U/S – 12(3) Warranty is :
“A stipulation collateral to the main purpose of the
contract, the breach of which gives rise to a claim for damages
but not to a right to reject the goods and treat the contract as
Warranty is only a collateral or subsidiary stipulation, hence
breach of a warranty will give a right only to claim damages
from the seller but not a right to reject the goods.
As to quiet
U/S – 45 Unpaid Seller is :
“One who has not been paid or tendered the whole of
the price or one who receives a bill of exchange or other
negotiable instrument as conditional payment and the
condition on which it was received has not been fulfilled
by reason of the dishonour of the instrument or
Rights of an
Suit for Price
Where the property
in goods has not
passed to the buyer
Where the property
in goods has passed
to the buyer
SALE BY AUCTION
Auction sale means a public sale where the intending
buyers come together at a particular place and quote the
price at which they are willing to buy the goods.
The price at which the person is offering is called „Bid‟
and the person offering the price is called the „Bidder‟.
Goods is sold to the highest bidder.
RULES REGARDING SALE BY AUCTION
A contract of sale is complete when the auctioneer
announces its completion by the fall of the hammer.
The bidder may withdraw the bid before the
announcement of the completion of sale.
The seller has the right to sell the goods subject to
“Reserve price”. Reserve price is the minimum price
below which the auctioneer will not sell the goods.