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  • 1. The Sales of Goods Act- 1930, An Introduction Mercantile Law
  • 2. MERCANTILE LAWS• Mercantile laws are the laws that govern and regulate trade and commerce.• These law deals with rights and obligations of parties to a mercantile agreement. Mercantile Law:The Sales of 2 Goods Act-1930, An
  • 3. SCOPE OF MERCANTILE LAWS Indian Mercantile Laws covers various Acts such as :• The Indian Contract Act,1872.• The Sales of Goods Act,1930.• The Partnership Act,1932.• The Companies Act,1956 .• Copyright Act,etc. Mercantile Law:The Sales of 3 Goods Act-1930, An
  • 4. The Sale of Goods Act,1930• Originally,the law relating to the sale of goods or movables was contained in the chapter VII of the Indian Contract Act,1872. Mercantile Law:The Sales of 4 Goods Act-1930, An
  • 5. • The Indian Contract Act,1872 embodied the simple and elementary rules relating to the sale of goods. The developments of modern business relations found the Indian Contract Act inadequate to deal with the new regulations or give effect to the new principles. Mercantile Law:The Sales of 5 Goods Act-1930, An
  • 6. • Subsequently the provisions relating to the sale of goods contained in the Indian Contract Act,1872 was repealed and re-enacted by the Sale of Goods Act,1930. Mercantile Law:The Sales of 6 Goods Act-1930, An
  • 7. • This Act has seen several amendments and adaptation orders in due course.The latest one of such was the Multimodal Transportation of Goods Act,1993. Mercantile Law:The Sales of 7 Goods Act-1930, An
  • 8. Introduction• The Sale of Goods Act,1930 was laid down to define and amend the law relating to the sale of goods or movables.The Act came into force on the 1st day of July,1930.It extends to the whole of India except Jammu and Kashmir. Mercantile Law:The Sales of 8 Goods Act-1930, An
  • 9. • This Act lays down special provisions governing the contract of sale of goods. The general law of contract is also applicable to contracts for the sale of goods unless they are inconsistent with the express provisions of the Sale of Goods Act. Mercantile Law:The Sales of 9 Goods Act-1930, An
  • 10. DEFINITIONS• Section 2 of the Sale of Goods Act, 1930 defines the terms which have been frequently used in the Act, which are as follows – Mercantile Law:The Sales of 10 Goods Act-1930, An
  • 11. • Buyer and Seller: ‘Buyer’ means a person who buys or agrees to buy goods [Sub Section (1)]; ‘seller’ means a person who sells or agrees to sell goods [Sub Section (13)]. Mercantile Law:The Sales of 11 Goods Act-1930, An
  • 12. • Goods and other related terms(a)"Goods” means every kind of movable property other than actionable claims and money; and includes stock and 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; [Sub Section (7)]. Mercantile Law:The Sales of 12 Goods Act-1930, An
  • 13. (b) Existing goods are such goods as are in existence at the time of the contract of sale, i.e., those owned or possessed by the seller (Section 6). Mercantile Law:The Sales of 13 Goods Act-1930, An
  • 14. (c) Future goods means goods to be manufactured or produced or acquired by the seller after making the contract of sale [Section 2 (6)]. Mercantile Law:The Sales of 14 Goods Act-1930, An
  • 15. (d) Specific goods means goods identified and agreed upon at the time the contract of a sale has been made [Section 2(14)]. Mercantile Law:The Sales of 15 Goods Act-1930, An
  • 16. (e) Unascertained goods defined only by description and not identified and agreed upon.(f) Ascertained goods have been held to mean goods identified in accordance with the agreement after the contract of sale has been made. Mercantile Law:The Sales of 16 Goods Act-1930, An
  • 17. (g) Goods are said to be in a deliverable state when they are in such a condition that the buyer would, under contract, be bound to take delivery of them. Mercantile Law:The Sales of 17 Goods Act-1930, An
  • 18. • Delivery - its forms and derivatives: Delivery means voluntary transfer of possession by one person to another [(Section 2(2)]. Mercantile Law:The Sales of 18 Goods Act-1930, An
  • 19. • Delivery may be of three kinds, which may be enumerated as follows:(i) Actual delivery: It is actual when the goods are physically delivered to the buyer.(ii) Constructive delivery: When it is effected without any change in the custody or actual possession of the thing as in the case of delivery by attornment (acknowledgement) Mercantile Law:The Sales of 19 Goods Act-1930, An
  • 20. (iii) Symbolic delivery: When there is a delivery of a thing in token of a transfer of something else. Mercantile Law:The Sales of 20 Goods Act-1930, An
  • 21. • "Document of title to goods" includes bill of lading, dock-warrant, warehouse keepers certificate, wharfingers certificate, railway receipt, multimodal transport document, warrant or order for the delivery of goods and any other document. Mercantile Law:The Sales of 21 Goods Act-1930, An
  • 22. • It is used in the ordinary course of business as proof of the possession or control of goods or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented; Mercantile Law:The Sales of 22 Goods Act-1930, An
  • 23. • Mercantile Agent [Sub-section (9)]: It means an agent having in the customary course of business as such agent an authority either to sell goods or to consign goods for the purpose of sale or to buy goods or to raise money on the security of the goods Mercantile Law:The Sales of 23 Goods Act-1930, An
  • 24. • Property [Sub-section (11)]: It means the general property (right of owner- ship-in goods) and not merely a special property. Mercantile Law:The Sales of 24 Goods Act-1930, An
  • 25. Flow chart Sale of goodsFormation of Performance Suit for breach Contract of Contract of Contract Effects of Unpaid the contract Seller Mercantile Law:The Sales of 25 Goods Act-1930, An
  • 26. Formation of the contractGeneral Price Subject- Conditions matter & Warranties Mercantile Law:The Sales of 26 Goods Act-1930, An
  • 27. General Formalities ofContract of sale The contract Agreement Sale to sell Mercantile Law:The Sales of 27 Goods Act-1930, An
  • 28. Subject- matter Goods perishing before making of contract Existing Goods perishing or before sale butfuture goods after agreement to sell Mercantile Law:The Sales of 28 Goods Act-1930, An
  • 29. The PriceAscertainment Agreement of to sell price at valuation Mercantile Law:The Sales of 29 Goods Act-1930, An
  • 30. CONTRACT OF SALE Mercantile Law:The Sales of 30 Goods Act-1930, An
  • 31. • Section 4 (1) of the Sale of Goods Act, 1930 defines the term ‘Contract of Sale’ as – 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. Mercantile Law:The Sales of 31 Goods Act-1930, An
  • 32. • Essentials of contract of sale:-(i) There must be at least two parties .(ii) The subject matter of the contract must be goods.(iii) price(iv) transfer of property in goods(v) absolute or conditional .(vi) All other essential elements of a valid contract Mercantile Law:The Sales of 32 Goods Act-1930, An
  • 33. • SALE AND AN AGREEMENT TO SELL The term Sale is defined in the Section 4(3) of the Sale of Goods Act, 1930 as – “where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale.” Mercantile Law:The Sales of 33 Goods Act-1930, An
  • 34. Example• A sells his Yamaha motorcycle to B for Rs.10,000. It is sale since the ownership of the motorcycle has been transferred from A to B. Mercantile Law:The Sales of 34 Goods Act-1930, An
  • 35. • The term “Agreement to sell” is defined in Section 4(3) of the Sale of Goods Act, 1930, as – where under a contract of sale the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. Mercantile Law:The Sales of 35 Goods Act-1930, An
  • 36. ExampleX agrees with Y on 10th of April thathe will sell his house to Y on 10th ofMay for a sum of Rs.3 lakhs. It is anagreement to sell .Since X agrees totransfer the ownership of his house toY in future. Mercantile Law:The Sales of 36 Goods Act-1930, An
  • 37. DifferencesBasis Sale Agreement to sell Nature Sale is an Agreement to of executed sell is anContract contract. executory contract Mercantile Law:The Sales of 37 Goods Act-1930, An
  • 38. Basis Sale Agreement to sellTransfer Sale gives to An agreement of the buyer to sell secureOwner- absolute to the buyer ship ownership of only the right the goods. against a particular individual. Mercantile Law:The Sales of 38 Goods Act-1930, An
  • 39. Basis Sale Agreement to sellSubject Goods may The goods willmatter be be ascertained unascertained. or specific Mercantile Law:The Sales of 39 Goods Act-1930, An
  • 40. Basis Sale Agreement to sellRemedy In case of In case of for breach,the breach,thebreach seller can seller can only only sue for sue for the price of damages the goods Mercantile Law:The Sales of 40 Goods Act-1930, An
  • 41. Sale distinguished from other similar contracts• Sale and Hire Purchase: The hire purchase contract is a development of modern commercial transactions.Here the owner of goods delivers the goods to a person who agrees to pay certain stipulated periodical payments as hire charges. Mercantile Law:The Sales of 41 Goods Act-1930, An
  • 42. Distinction between the ‘sale’ and ‘hire-purchase’ Basis Sale Hire purchase Transfer of Property in The goods ownership the goods is passes to the transferred hirer upon to the buyer payment of immediately the last at the time installment. of contract Mercantile Law:The Sales of 42 Goods Act-1930, An
  • 43. Basis Sale Hire-purchasePosition The position The position of the buyer is of the hirer is that of the that of a bailee owner of the till he pays the goods last installment Mercantile Law:The Sales of 43 Goods Act-1930, An
  • 44. Basis Sale Hire purchaseTerminatio- The buyer The hirern cannot may,terminate terminate the the contract,by contract and is returning the bound to pay goods to its the price of the owner without goods. any liability to pay the remaining installment Mercantile Law:The Sales of 44 Goods Act-1930, An
  • 45. Sale and Bailment• A ‘bailment’ is the delivery of goods for some specific purpose under a contract on the condition that the same goods are to be returned to the bailor or are to be disposed of according to the directions of the bailor. Mercantile Law:The Sales of 45 Goods Act-1930, An
  • 46. DifferenceBasis Sale BailmentTransfer of The property There is onlyownership in goods is transfer of transferred possession of from the goods from the seller to the bailor to the bailee buyer for any of the reasons like safe custody, carriage etc. Mercantile Law:The Sales of 46 Goods Act-1930, An
  • 47. Basis Sale BailmentReturn of The return of The bailee mustgoods goods in return the goods contract of to the bailor on sale is not the possible. accomplishment of the purpose for which the bailment was made. Mercantile Law:The Sales of 47 Goods Act-1930, An
  • 48. Basis Sale BailmentConsidera The The-tion consideration consideratio is the price in n may be terms of gratuitous money or non- gratuitous Mercantile Law:The Sales of 48 Goods Act-1930, An
  • 49. Sale and contract for work and labour• A contract of sale of goods is one in which some goods are sold or are to be sold for a price. But where no goods are sold, and there is only the doing or rendering of some work of labour, then the contract is only of work and labour and not of sale of goods Mercantile Law:The Sales of 49 Goods Act-1930, An
  • 50. Example• where gold is supplied to a goldsmith for preparing an ornament or when an artist is asked to paint a picture, even when he himself arranges for all colours etc is a contract for work and labour. Mercantile Law:The Sales of 50 Goods Act-1930, An
  • 51. Formalities of contract of saleMercantile Law:The Sales of 51 Goods Act-1930, An
  • 52. • Section 5 of the Sale of Goods Act, 1930 lays down the rule as to how a contract of sale may be made and has nothing to do with the transfer or passing of the property in the goods. Mercantile Law:The Sales of 52 Goods Act-1930, An
  • 53. • A contract of sale may be made in any of the following modes :(i) There may be immediate delivery of the goods; or(ii) There may be immediate payment of price, but it may be agreed that the delivery is to be made at same future date; or Mercantile Law:The Sales of 53 Goods Act-1930, An
  • 54. (iii) There may be immediate delivery of the goods and an immediate payment of price; or(iv) It may be agreed that the delivery or payment or both are to be made in installments; or(v) It may be agreed that the delivery or payment or both are to be made at some future date. Mercantile Law:The Sales of 54 Goods Act-1930, An
  • 55. Subject matter of contract of sale Mercantile Law:The Sales of 55 Goods Act-1930, An
  • 56. • The subject matter of contract of sale is always the goods. This is enshrined in the Sale of Goods Act, 1930 under Sections 6,7 and 8. Thus every type of movable property falls with in the definition of the”goods” given under section2(7)of the Sales of goods. Mercantile Law:The Sales of 56 Goods Act-1930, An
  • 57. • Goodwill,patents,trademark,copy, rights etc. are considered as movable properties. Though actionable claims and money have been excluded. Money here means current money,but not the rare or old coins which may be treated as goods bought and sold as such. Mercantile Law:The Sales of 57 Goods Act-1930, An
  • 58. Existing or future goods• The subject matter of contract must always be goods. The goods may be existing or future goods Section 6). Mercantile Law:The Sales of 58 Goods Act-1930, An
  • 59. Destruction of subject matter of a contract(i) Goods not existing at the time of contract: If at the time a contract of sale is entered into, the subject-matter of a contract being specific goods, which without the knowledge of the seller have been destroyed or so damaged as not to answer to the description in the contract, and then the contract is void ab initio(Section 7). Mercantile Law:The Sales of 59 Goods Act-1930, An
  • 60. (ii) Goods perishing after the contract is made: Where there is an agreement to sell specific goods and the goods, subsequently without any fault of the seller or the buyer perish or suffer such damages in the agreement before the risk passes to the buyer, the agreement becomes void (Section 8). Mercantile Law:The Sales of 60 Goods Act-1930, An
  • 61. Types of Goods GoodsExisting Future Contingent Mercantile Law:The Sales of 61 Goods Act-1930, An
  • 62. ExistingSpecific Ascertained Unascertained Mercantile Law:The Sales of 62 Goods Act-1930, An
  • 63. Existing Goods• Goods which are owned or possessed by the seller at the time of making the contract of sale are called existing goods Mercantile Law:The Sales of 63 Goods Act-1930, An
  • 64. Example• Where A agrees to sell his horse to B, believing that it exists ,When in fact the horse is dead ,no contract will arise. Mercantile Law:The Sales of 64 Goods Act-1930, An
  • 65. • The existing goods may be:(a) Specific goods: goods identified and agreed upon at the time of making of the contract of sale.(b) Ascertained goods: Goods identified subsequent to the formation of the contract of sale is known as ascertained goods. Mercantile Law:The Sales of 65 Goods Act-1930, An
  • 66. Example• X goes to Maruti car centre to purchase a car.The dealer has 20 models in his shop.These 20 cars shall be called unascertained goods.Now,’X” selects a particular car of a specific model and the dealer agrees to deliver the same.The car so selected and approved by X shall be called as ascertained Goods. Mercantile Law:The Sales of 66 Goods Act-1930, An
  • 67. • Unascertained or generic goods: goods which are not specifically identified by the buyer, but are contracted on the basis of description. Mercantile Law:The Sales of 67 Goods Act-1930, An
  • 68. Example• X has ten horses. He promises to sell one of them but does not specify which horse he will sell.It is a contract of sale of ‘ unascertained goods.’ Mercantile Law:The Sales of 68 Goods Act-1930, An
  • 69. Future Goods• Those goods which a seller does not possess or own at the time of the contract. It is to be manufactured or produced or acquired by the seller after making the contract of sale. Mercantile Law:The Sales of 69 Goods Act-1930, An
  • 70. Example• C agrees to buy the entire production of cotton that would yield in D’s farm,at the rate of Rs.1000 per quintal.This is an agreement of sale of future goods not in possession of the seller at the time of contract,they can become the subject matter of an agreement to sell only and not of sale. Mercantile Law:The Sales of 70 Goods Act-1930, An
  • 71. Contingent Goods• Goods the acquisition of which by the seller depends upon a contingency which may or may not happen [(Section 6(2)]. Mercantile Law:The Sales of 71 Goods Act-1930, An
  • 72. Example• P contracts to sell 50 pieces of particular article provided the ship which is bringing them reaches the port safely. This is an agreement for the sale of contingent goods. Mercantile Law:The Sales of 72 Goods Act-1930, An
  • 73. The PriceMercantile Law:The Sales of 73 Goods Act-1930, An
  • 74. • ‘Price’ means the monetary consideration for sale of goods [Section 2 (10)]. Money means legal tender or money in circulation. Old and rare coins not come under the scope of this definition.• Price must be either certain and definite or must be determined . Mercantile Law:The Sales of 74 Goods Act-1930, An
  • 75. Conditions and warranties• These are the stipulations in a contract of sale with reference to subject-matter of sale.These stipulations forms a part of the contract of sale and breach of it provides a remedy to the buyer against the seller. Mercantile Law:The Sales of 75 Goods Act-1930, An
  • 76. SummaryContract of sale of goods• is either sale or an agreement to sell.• Subject-matter must always be movable goods.• Consideration may be price in terms of money. Mercantile Law:The Sales of 76 Goods Act-1930, An
  • 77. DifferencesContract Contract for Hire purchaseof sale work and agreement labourIt Here the Here propertycontempla substance of passes only the contract istes the after the the exercise ofdelivery of skill or labour. payment of allgoods. Goods delivery hire- is subsidiary. instalments. Mercantile Law:The Sales of 77 Goods Act-1930, An
  • 78. Mercantile Law:The Sales of 78 Goods Act-1930, An
  • 79. (1) The Sales of goods act governs ------------------a.contract of sale of goodsb.general law of contractc.law of partnershipd.hire purchase contracts Mercantile Law:The Sales of 79 Goods Act-1930, An
  • 80. (1) The Sales of goods act governs ------------------a. contract of sale of goodsb. general law of contractc. law of partnershipd. hire purchase contracts Mercantile Law:The Sales of 80 Goods Act-1930, An
  • 81. (2) The sales of goods act deals with----------------a. movable propertyb. mortgagec. pledged. actionable claim Mercantile Law:The Sales of 81 Goods Act-1930, An
  • 82. (2) The sales of goods act deals with----------------a.movable propertyb.mortgagec. pledged.actionable claim Mercantile Law:The Sales of 82 Goods Act-1930, An
  • 83. (3) The main object of a contract of sale is-a.transfer of possession of goodsb. transfer of property in goodsc.delivery in goodsd.payment in price Mercantile Law:The Sales of 83 Goods Act-1930, An
  • 84. (3) The main object of a contract of sale is-a.transfer of possession of goodsb.transfer of property in goodsc.delivery in goodsd.payment in price Mercantile Law:The Sales of 84 Goods Act-1930, An
  • 85. (4) A contract whereby the seller transfers the property in goods to the buyer for a price, is a-a.barter systemb.exchangec.saled.mortgage Mercantile Law:The Sales of 85 Goods Act-1930, An
  • 86. (4) A contract whereby the seller transfers the property in goods to the buyer for a price, is a-a. barter systemb. exchangec.saled.mortgage Mercantile Law:The Sales of 86 Goods Act-1930, An
  • 87. (6) A Corn was delivered on terms that on demand either the price would be paid or an equal quantity of corn would be returned.This is held to be-a. agreement to sellb. Salec. Barterd. exchange Mercantile Law:The Sales of 87 Goods Act-1930, An
  • 88. (6) A Corn was delivered on terms that on demand either the price would be paid or an equal quantity of corn would be returned.This is held to be-a. agreement to sellb. salec. barterd. exchange Mercantile Law:The Sales of 88 Goods Act-1930, An
  • 89. (7) Goods which are in existence at the time of the Contract of Sale is known asa.present Goods.b.existing Goods.c.specific Goods.d.none of the above Mercantile Law:The Sales of 89 Goods Act-1930, An
  • 90. (7) Goods which are in existence at the time of the Contract of Sale is known asa.present Goods.b.existing Goods.c.specific Goods.d.none of the above Mercantile Law:The Sales of 90 Goods Act-1930, An
  • 91. (8) A contract for the sale of future goods is-a. saleb. voidc. hire purchase contractd. agreement to sell Mercantile Law:The Sales of 91 Goods Act-1930, An
  • 92. (8) A contract for the sale of future goods is-a. saleb. voidc. hire purchase contractd. agreement to sell Mercantile Law:The Sales of 92 Goods Act-1930, An
  • 93. (9) The goods identified and agreed upon at the time of the contract of sale is ------------a. existing goodsb.future goodsc.specific goodsd.unascertained goods Mercantile Law:The Sales of 93 Goods Act-1930, An
  • 94. (9) The goods identified and agreed upon at the time of the contract of sale is ------------a. existing goodsb. future goodsc. specific goodsd. unascertained goods Mercantile Law:The Sales of 94 Goods Act-1930, An
  • 95. (10) In a hire purchase agreement ,the hirer-a.has an option to buy the goodsb.must buy the goodsc.is not given the possession of goodsd.must return the goods Mercantile Law:The Sales of 95 Goods Act-1930, An
  • 96. (10) In a hire purchase agreement ,the hirer-a.has an option to buy the goodsb.must buy the goodsc.is not given the possession of goodsd.must return the goods Mercantile Law:The Sales of 96 Goods Act-1930, An
  • 97. (11) Consideration in the contract of sale may be in terms of-a. priceb. kindc. exchange of the goodsd.all of the above Mercantile Law:The Sales of 97 Goods Act-1930, An
  • 98. (11) Consideration in the contract of sale may be in terms of-a.priceb.kindc.exchange of the goodsd.all of the above Mercantile Law:The Sales of 98 Goods Act-1930, An
  • 99. (12) Contract of sale of goods must constitute-a.atleast two partiesb. subject matter must be the goodsc. transfer of ownershipd. all the above Mercantile Law:The Sales of 99 Goods Act-1930, An
  • 100. (12) Contract of sale of goods must constitute-a. atleast two partiesb. subject matter must be the goodsc. transfer of ownershipd. all the above Mercantile Law:The Sales of 100 Goods Act-1930, An
  • 101. (13) If P makes an agreement with Q, an artist, to paint a portrait of P for 200 dollars & Q uses his own canvas & paint.Here it is--a.Contract of sale.b.Contract of work & materials.c.Sale on approval.d.Hire-Purchase agreement. Mercantile Law:The Sales of 101 Goods Act-1930, An
  • 102. (13) If P makes an agreement with Q, an artist, to paint a portrait of P for 200 dollars & Q uses his own canvas & paint.Here it is--a. Contract of sale.b. Contract of work & materials.c. Sale on approval.d.Hire-Purchase agreement. Mercantile Law:The Sales of 102 Goods Act-1930, An
  • 103. (14) R agrees to deliver his old motorcycle valued at Rs.25000 to S in exchange for a new motorcycle and agrees to pay the difference in cash it is-a. contract of saleb. agreement to sellc. exchanged.barter Mercantile Law:The Sales of 103 Goods Act-1930, An
  • 104. (14) R agrees to deliver his old motorcycle valued at Rs.25000 to S in exchange for a new motorcycle and agrees to pay the difference in cash it is-a. contract of saleb. agreement to sellc. exchanged. barter Mercantile Law:The Sales of 104 Goods Act-1930, An
  • 105. (15) X, the owner of certain goods, being not aware of this fact.A pretending to be an owner of the goods sells them to X .This constitutes -a.saleb.agreement to sellc.no saled.none of the above Mercantile Law:The Sales of 105 Goods Act-1930, An
  • 106. (15) X, the owner of certain goods, being not aware of this fact.A pretending to be an owner of the goods sells them to X .This constitutes -a. saleb. agreement to sellc. no saled.none of the above Mercantile Law:The Sales of 106 Goods Act-1930, An
  • 107. THE ENDMercantile Law:The Sales of 107 Goods Act-1930, An
  • 108. THE ENDThe Sales of goods Act-1930,An Introduction