2. INTRODUCTION
2
Before The Sales of Goods Act,transactions
relating to sales and purchase of goods were
regulated by The Indian Contract Act 1872.
The Indian Sales Of Goods Act was passed in
1930 and sections 76 to 123 were repealed from
The Indian Contract Act.
3. Cont.
3
It came into force on 1st July 1930 and w.e.f 22nd
Sept. 1963 the word Indian was removed and now
the present act is called The Sales Of Goods Act
1930.
This act extends to whole of INDIA except the state
of Jammu n Kashmir.
4. DEFINATION
4
According to Section 4(1) of The Sales of Goods
Act,1930.
“contract of sales of goods is a contract
whereby the seller transfer or agrees to
transfer the property in goods to the buyer
for a price”
Contract of Sale is a generic term ,which includes
both sales and an agreement to sell
5. ESSENTIAL ELEMENTS OF THE ACT
5
BUYER AND
SELLER
GOODS
TRANSFER OF
PROPERTY
PRICE
ESSENTIAL
ELETMENTS
OF VALID
CONTRACT
6. A.BUYER AND SELLER
6
“BUYER”
means a person who buys or agrees to buy
good.[Section 2(1)]
“SELLER”
means a person who sells or agrees to sell the
good.[Section 2(13)]
A person cannot be a buyer as well as a seller as a
person cannot buy his own goods
7. B. GOODS
7
“GOODS” means every type of movable property
other than actionable claim n money but it can
include stock and shares,crops,lands etc.
8. Cont.
8
ACTIONABLE CLAIM:- It means which can be
enforced through the courts of Law, e.g. debt due.
MONEY:- means the legal tender i.e. the currency
of the country but not old coins coins.
9. C. TRANSFER OF PROPERTY
9
“PROPERTY” means the general property in
goods, and not merely a special property.
General property in goods means ownership of
the goods
Special property on the goods means possession
of the goods
10. Cont.
10
Thus, there may be either a transfer of ownership of
goods or an agreement to transfer the of the goods.
The ownership may transfer either immediately on
completion of sale or something in future in
agreement to sell.
11. d. price
11
For every sale or purchase their must be a price of the
goods.
PRICE means the MONEY CONSIDERATION for the sale
of goods.
i. When there is no consideration,it amounts to gift and
not sale
ii. However , the consideration may be partly in money
and partly in goods because the law does not
prohibited as such.
12. E. ESSENTIAL ELEMENTS OF VALID
CONTRACT
12
Essential elements of a valid contract as specified
under Section 10 of Indian Contract Act,1872 must
also be present.
a) Offer and Acceptance
b) Delivery and Payment
c) Express or Implied
13. CONTRACT OF SALE
13
Under Section 4(3) the Contract of Sale Includes:-
1) SALE:- Sale means where the ownership in goods
is transferred.
2) AGREEMENT TO SELL :-Agreement to sell
includes where the transfer of ownership in goods
is to take place at a future time or subject to the
fulfillment of some condition.
14. Distinction between sale and agreement to sell
14
S.No BASIS SALE AGREEMENT TO
SELL
1. Transfer of
ownership
Transfer of ownership of
goods takes place
immediately.
Transfer of ownership of
goods takes place in
future times.
2. Executed or
Executory
It is an executed
contract.
It is an executory contract
because something
remains to happen.
3. Conveyance of
Property
Buyer gets the right to
enjoy the goods against
whole of the world. It
creates jus in rem(Right
against property)
Buyer does not get such
right to enjoy the goods.
It only creates jus in
personam (Right against
person)
15. Cont.
15
4. Transfer of
Risk
Transfer of risk* of
loss of goods takes
place immediately as
the ownership is
been transferred. As
a result in case of
destruction of goods,
the loss shall be
beared by the buyer.
(Risk*-Risk follows
ownership)
Transfer of risk
of loss of goods
does not takes
place because the
ownership is not
transferred. As a
result, in case of
destruction of
goods the loss
shall be borne by
the seller.
16. GOODS
16
U/s 2(7) GOODS MEANS
“GOODS” means every type of movable property other
than actionable claim n money but it can include
stock and shares,crops,lands etc.”
ACTIONABLE CLAIM:- It means which can be enforced
through the courts of Law, e.g. debt due.
MONEY:- means the legal tender i.e. the currency of the
country but not old coins
IMMOVABLE PROPERTY
18. 1.Existing goods
18
EXISTING GOODS
means the goods ,which are either owned or possessed
by the seller at the time of contract of sale.
Existing goods are of 3 types:
a) Specific goods
b) Ascertained goods
c) Unascertained goods
19. 2.Future goods
19
FUTURE GOODS
means goods to be manufactured or produced or
acquired by the seller after the making of the
contract of sale. There is an agreement to sell only.
For Example:-X will sell the goods to Y all the crops to
be grown at Haryana in his farm.
20. 3.Contingent goods
20
CONTINGENT GOODS
means those goods,acquition of which by the seller
depends upon a contingency, which may or may not
happen.
For example:-X agrees to sell to y all the crops to be
grown at Z’s farm in Haryana during the year 2007
season for sum of 1 lakh rupees,if Z sells the crops.
21. Conditions and Warranties
Representation: Statement made by the seller before
entering into a contract
Stipulation: If such representation forms an integral
part of the contract and other party relies upon it.
No Representation: CAVEAT EMPTOR’
i,e, Let the Buyer Beware – is applied
22. CONDITION : Sec.12(2)
A condition is a stipulation essential to the main
purpose of the contract breach of which gives rise to
a right to treat the contract as repudiated1
23. Warranty : Sec.12(3)
A 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 right to reject the
goods and treat the contract as repudiated2
24. When condition is to be treated as warranty:
Sec.13(1)-13(3)
Waiver of condition
Compulsory treatment of breach of condition as
breach of warranty
25. Express Conditions : Expressely provided in the
contract
Implied conditions & warranty : which the law
implies in a contract of sale
Implied condition & warranty may be negatived or
varied by an express agreement or by the course of
dealings b/w parties or by the usage & customs of
trade.Sec.62
26. Sec.62 is based upon two maxims:
Expression Facit Cessare Tacitum i,e, what is
expressed makes what is tacit or implied to cease
Modes et conventio vincent Legem i,e, customs &
agreements overrule law(Implied condition &
warranty)
27. Implied conditions :
Conditions as to title [Sec.14(a)]
Sale by description:
A) Goods must correspond to description (Sec.15)
B) Conditions as to Merchandibility [Sec.16(2)]
C) Conditions as to wholesomeness
D) Conditions as to fitness for a particular
purpose (Sec.16)
Sale by Sample (Sec.17)
Sale by sample as well as by description (Sec.15)
28. Implied Warranties :
Warranty of Quiet possession-Sec.14(6)
Warranty against encumbrances-Sec.14(c)
Warranty to disclose dangerous natures of goods.
29. CAVEAT EMPTOR
Let the ‘Buyer Beware’
The maxim Caveat Emptor does not apply & the
contract will be subject to the implied conditions
under the following circumstances :
1. Sale under fitness for buyers purpose
2. Sale under merchandable quality
3. Sale under usage of trade
4. Consent by Fraud
31. Transfer of Title/Property in Goods – Sec.18-25
Property in Goods mean?
Property in goods Vs.Possession of Goods
When does the property in goods pass from the
seller to buyer ?
1.If the goods are lost or damaged
2.Damage to goods by third party
3.Insolvency
32. When does the property pass from
seller to the buyer?(Sec.18-25)
S P E C I F I C O R A S C E R T A I N E D G O O D S
33. Rules as regards Ascertaining Intention (Sec.20-
24)
1) Specific goods in Deliverable State (Sec.20)
Goods are said to be in D/S when they are in such
state that the buyer would under the contract be
bound to take delivery of them
2) Specific goods not in a Deliverable state (Sec.21)
34. Transfer of Title/Property
Where there is a contract for the sale of specific goods
in a deliverable state but the seller is bound to weigh,
measure, test or to do some other thing with
reference to them, for ascertaining the price , the
property does not pass till such act or thing is done
and the buyer has notice of it.
Unascertained or future goods (Sec.18)
Sale “On Approval” or “Sale or Return” basis
35. Transfer of Title/Property
When he signifies his approval or acceptance to the
seller or does any other act, adopting the
transaction
If he does not signify his approval or acceptance to
the seller but retains the goods w/o giving notice of
rejection, then, if a time has been fixed for the
return of the goods, on the expiration of such time,
and if no time has been fixed on the expiration of a
reasonable time.
36. Transfer of Title by Non Owners
General rules as to transfer of title (Sec.27)
Maxim : ‘Nemo dat quod non habet’
37. EXCEPTIONS TO THE RULE:
Sale by mercantile agent (Sec.27)
Sale by a joint owner/coowner (Sec.28)
Sale by a person in possession under a voidable
contract (Sec.29)
Sale by a seller in possession of goods after sale
(Sec.30)
Sale by a buyer in possession of goods
Sale by an unpaid seller (Sec.54)
38. Sale by Auction (Sec.64)
A sale by auction is a public sale in which goods are
offered to the highest bidder
In above case following rules apply:
1) when the goods are put up for sale in lots, each lot
is deemed, prima facie, to be the subject matter of a
separate contract of sale.
39. Sale by Auction (Sec.64)
2) At an auction, the sale is complete when the
auctioneer announces its completion by the fall of
the hammer or in other customary manner; until
such completion any bidder may withdraw his bid. It
is also the practice to say 3 times.
3) A right to bid may be reserved expressly by or on
behalf of the seller & where such right is expressly so
reserved, but not otherwise, the seller or any person
on his behalf may bid at Auction
40. 4) If the seller makes use of pretended bidding to
raise the price, sale is voidable at the option of the
buyer
41. DELIVERY (Sec.2[2])
‘Voluntary transfer of possession of goods from
one person to another’
1) Physical or Actual Delivery: Physical possession
of the good is handed over by the seller to the
buyer
2) Constructive Delivery: When a third person who
is in possession of the goods acknowledges that he
holds the goods on behalf of the buyer
42. Symbolic Delivery: Delivery is made by indicating or
giving a symbol e.g: Handing over the key of a
godown to the buyer
43. Rules as to Delivery (Sec.39) :
Mode of delivery
Effect of part delivery
Buyer to apply for delivery
Place of delivery
Goods in possession of a third party
Time of delivery
Expense of delivery
Instalment delivery
Delivery to a carrier or wharfinger
44. Unpaid Seller (Sec.45) :
A seller is deemed to be an U/S when:
1) The whole of the price has not been paid or
tendered
2) A bill of exchange or other negotiable
instrument has been received as a conditional
payment & the condition on which it was received
has not been fulfilled by reason of dishonor of the
instrument
45. Rights of an U/S :
1) Right against goods:
a) Lien on goods
b) A right of stoppage-in-transit
c) A right of Re-sale
46. A) Lien on Goods (Sec.47-49) in case:
i) the goods are not sold on credit
ii) the goods have been sold on credit, but the period
of credit has expired
iii) the buyer becomes insolvent
47. B.Right of stoppage in transit (Sec.50-52)
The transit is end in following cases:
If the buyer obtains the possession of the goods
before its arrival at the destination
If, after the arrival at their destination, the carrier
acknowledges to the buyer that he holds on his
behalf
If the carrier wrongfully refuses to deliver the
goods to the buyer
48. C.Right of Re-sale (Sec.54)
Where the goods are of perishable nature
When the buyer does not pay the price
49. 2.Rights of an U/S against the buyer personally:
Suit for price (Sec.55)
Suit for damages for Non Acceptance (Sec.56)
Suit for damages for Breach of contract
Suit for Interest (Sec.61)
