This document outlines key concepts in contract of sale under business law. It defines a contract of sale as an agreement where the seller transfers goods to the buyer for a price. The essential elements of a valid contract of sale are the seller, buyer, goods, transfer of property, price, and elements of a valid contract. The document also discusses implied conditions, warranties, remedies, unpaid sellers' rights, and auction sales.

1. BUSINESS LAW
UNIT 5

2. CONTRACT OF SALE
• 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 price.
• 'Contract of sale’ is a generic term which includes both a sale
as well as an agreement to sell.

3. ELEMENTS OF CONTRACT OF SALE
• SELLER AND BUYER
• GOODS
• TRANSFER OF PROPERTY
• PRICE
• ESSENTIAL ELEMENTS OF VALID CONTRACT

4. FORMALITIES OF CONTRACT OF SALE
• OFFER AND ACCEPTANCE
• DELIVERY AND PAYMENT
• EXPRESS AND IMPLIED

5. AGREEMENT TO SALE
• According to section 4(3) of the Sale of Goods Act it is defined
as
• “where under a contract of sale the transfer of 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”

6. HIRE PURCHASE
• The ownership will be passed on to the buyer only after agreed
number of installments has been paid
• to the seller.

7. GOODS
• 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 the served before sale or under the contract of
sale.

8. TYPES OF GOODS
• EXISTING
• FUTURE
• CONTINGENT
• ASCERTAINED
• UNASCERTAINED

9. CONDITIONS AND WARRANTIES
• CONDITIONS:-
• A ‘condition’ is a stipulation that is essential to the main
purpose of the contract. If there is a breach of condition the
affected party can-treat the contract as repudiated.

10. • WARRANTY:-
• A warranty is defined as a stipulation that is collateral to the
main purpose of the contract.
• If there is a breach of warranty the affected party can only
claim damages and has no right to reject the contract”.

11. IMPLIED CONDITIONS
• SALE BY TITLE
• SALE BY SAMPLE
• SALE BY DESCRIPTION
• SALE BY DESCRIPTION AS WELL AS SAMPLE
• CONDITIONS AS TO QUALITY AND FITNESS
• CONTITON AS TO WHOLESOMENESS
• CONDTION AS TO MERCHANTILE QUALTIY

12. IMPLIED WARRANTY
• WARRANTY AS TO QUIET POSSESSION
• WARRANTY OF FREEDOM FROM ENCUMBRANCES
• WARRANTY TO DISCLOSE DANGER OF GOODS

13. CAVEAT EMPTOR
• Caveat emptor means ‘let the buyer beware’.
• It is not part of the seller’s duty to point out defect of the
goods which he offers for sale; rather it is the duty of the buyer
of satisfies himself about the quality as well as the suitability of
the goods.

14. EXCEPTIONS TO CAVEAT EMPTOR
• In case of misrepresentation by the seller
• In case of concealment of latent defect
• In case of sale by description
• In case of sale by sample
• In case of sale by description as well as sale by sample
• Fitness for a particular purpose
• Merchantable quality

15. REMEDIES FOR BREACH OF CONTRACT OF SALE
• Remedies available to seller:
• Suit for price (Sec 55)
• Suit for damages for non-acceptance of goods (Sec 56)
• Suit for damages for repudiation of contract (Sec 60)
• Suit for interest (Sec 61)

16. • Remedies available to buyer:
• Suit for damages for non-delivery of goods (Sec 57)
• Suit for damages for repudiation of the contract (Sec 60)
• Suit for specific performance (Sec 58)
• Suit for breach of warranty (Sec 59)
• Suit for interest (Sec 61)

17. UNPAID SELLER
• When payment is made by a negotiable instrument it is usually
a conditional payment, the condition being that the instrument
shall be duly honoured. If the instrument is not honoured, the
seller is deemed to be an “unpaid seller”.

18. RIGHTS OF UNPAID SELLER
• RIGHTS FOR SELLER:-
• RIGHT OF LIEN
• RIGHT OF STOPPAGE LF GOODS IN TRANSIT
• RIGHT OF RESALE

19. • RIGHTS FOR BUYER:-
• SUIT FOR DAMAGE
• SUIT FOR PRICE
• SUIT FOR REPUDIATION OF CONTRACT
• SUIT FOR INTERST

20. AUCTION SALE
• An auction is the method of selling property by bids usually to
the highest bidder by public competition.
• The auctioneer, who sells goods by auction, is an agent of the
seller only. Under this method of sale, a contract is formed
between the auctioneer and the buyer, and incurs certain
liabilities though not all the liabilities of a seller .