The document discusses key concepts from the Sale of Goods Act 1930 in India, including: - A contract of sale is an agreement where the owner of goods transfers property to a buyer for a price. It requires goods, parties, consideration, and consent. - Implied conditions include that the seller has title to sell the goods, the goods match any description or sample provided, and are of merchantable quality and fit for the buyer's purpose. - A condition is an essential term, while a warranty is less important. Breach of a condition allows terminating the contract, while breach of a warranty only permits damages. - The doctrine of caveat emptor means the buyer bears responsibility to examine

1. Naveed Butt
Mohsin Fayyaz
Bilal Islam
Sabahat Malik

2. Sale of Goods Act, 1930
 Definition
 Essentials of a Contract of Sale
 How contract is made
 Condition of a contract of sales of goods
 And exemptions in contract of sales

3. Definition
 It is a contract by which the ownership
of movable goods is transferred from
the seller to the buyer. The term
‘contract of sale’ is defined in Section
4(1) of the Sale of Goods Act 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”.

4. Essentials of a Contract of Sale
(i) All requirements of a valid contract
must be fulfilled
(ii) Two Parties
(iii) Goods
(iv) Transfer of Property/ownership
(v) Price
(vi) Includes both a ‘sale’ and
‘agreement to sale’
(vii) No formalities are required

5. Price
 Exchange or sale
Mode of determining of price [ section 9(1)]
The price in a contract of sale may be
 Fixed by contract
 By third parties

6. Goods
 The subject matter of a contract of
sale of goods is goods. According
to Sec 2(7) “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 contract of sale.

7. Actionable claim
 Means a claim which can be
enforced through the court of law e.g.
a debt due from one person to
another is an actionable claim.

8. Examples of Goods
 Goodwill, Trade Mark, Copyright,
Patent right, Water, Gas, Electricity,
machines, animals are all example of
goods.

9. Classification of Goods
 Existing Goods
 Specific goods
 Unascertained goods
 Future Goods:- This is applicable to
goods which are subject matter of the
agreement to sale.
 Contingent Goods:- i.e. the goods
arriving by ships etc.

10. Sale & Agreement to sell
 The ownership is
transferred
immediately.
 Executed contract.
 A seller can sue for
price.
 He has all the right of
unpaid seller.
 Sale takes place in
the case of existing
goods usually.
 A buyer bears the
risk.
 At some future date.
 Executory Contract
 A seller can sue for
damages.
 An agreement to sell
takes place in the case of
future goods.
 A seller bears the risk.

11. How Contact of sale is made
 A contract of sale is made by an offer to buy or
sell goods for a price and the acceptance of
such offer.
 The contract may provide for the immediate
delivery of the goods or immediate payment of
the price or both, or for the delivery or payment
by installments, or that the delivery or payment
or both shall be postponed.
 Subject to the provisions of any law for the time
being in force, a contract of sale may be made in
writing or by word of mouth, or partly in writing
and partly by word of mouth or may be implied
from the conduct of the parties.

12. Performance of the Contract
 Duties of seller and buyer:- It is the duty of the seller to
deliver the goods and of the buyer to accept and pay for
them, in accordance with the terms of the contract of sale.
 Delivery:- Delivery of goods sold may be made by doing
anything which the parties agree shall be treated as
delivery or which has the effect of putting the goods in the
possession of the buyer or of any person authorized to
hold them on his behalf.
 Effect of part delivery:- A delivery of part of goods, in
progress of the delivery of the whole has the same effect,
for the purpose of passing the property in such goods, as a
delivery of the whole, but a delivery of part of the gods,
with an intention of severing it from the whole, does not
operate as a delivery of the remainder.

13. Stipulation, Condition &
Warranty
 A representation which forms part of the
contract of sale and affects the contract,
is called a ‘stipulation’.
 A stipulation which is most important
for formation of the contract of sale is
known as a ‘condition’.
 A stipulation which is collateral or
of least importance for the formation of
the contract of sale, is known as a
‘warranty’.

14. Unpaid seller’s rights
 Subject to the provisions of this Act and of any law for the
for the time being in force, not with standing that the
property in the goods may have passed to the buyer,
the unpaid seller of goods, as such, has by implication of
law.
I. a lien on the goods for the period while he is in
possession of them,
II. in case of the insolvency of the buyer a right of stopping
the goods in transit after he has parted with the
possession of them.
III. a right of re-sale as limited by this Act.
 Where the property in goods has not passed to the
buyer, the unpaid seller has, in addition to his other
remedies, a right of withholding delivery similar to and co-
extensive with his rights of lien and stoppage in transit
where the property has passed to the buyer.

15. Conditions
Section 12(2) of the Sale of Goods Act,
1930 defines condition as, “a condition
is a stipulation essential to the main
purpose of the contract, the breach of
which gives rise to right to treat the
contract as repudiated.”
Example: Buyer wanted a horse which
could run at a speed of 45 m.p.h.

16. Implied Conditions
 Condition as to Title [Sec 14(a)]
 Condition as to Description [Sec 15]
 Condition as to Sample [Sec 17(2)]
 Condition as to Sample as well as
Description [Sec 15]
 Condition as to Quality or Fitness for
Buyer’s purpose [Section 16(1)]
 Condition as to Merchantability
[Section 16(2)]
 Condition as to Wholesomeness

17. Condition as to Title [Sec 14(a)]
 It is the most important implied
condition in a contract of sale that
seller has the right to sell the
goods.

18. Condition as to Description [Sec
15]
 Whenever the goods are sold by
description, the implied condition is
that the goods shall correspond with
the description.

19. Condition as to Sample
 In a sale by sample there is a implied
condition that the goods shall correspond
with the sample in quality, and the goods
shall be free from the defects which render
them un-merchantable.
 Sale by sample has following three
conditions:
1. Correspondence of Goods with sample in
quality [sec 17(2)(a)]
2. Reasonable opportunity of comparing
goods with the sample [Sec 17(2)(b)]
3. Merchantability of Goods [Sec 17(2)(c)]

20. Condition as to Sample as well
as Description [Sec 15]
 Sometimes, the seller shows sample
to the buyer and also gives him
description. In such case, the implied
condition is that the goods shall
correspond with both, the sample
as well description.

21. Condition as to Merchantability
[Section 16(2)]
The term merchantability means two
things:
 If goods are purchased for resale, they
should be immediately re-saleable
&
 If goods are purchased for self use
then they should be reasonably fit for
the purpose for which they are
generally used.
.

22. Condition & Warranties
 Condition is a stipulation
which is essential to
the main purpose of
the contract.
 It is of vital importance
 In case of breach of
condition, the buyer
may put an end to the
contract.
 A breach of condition
may be treated as a
breach of warranty.
 Warranties are subsidiary
or collateral to the main
purpose of the contract.
 It is not of vital importance.
The main contract can be
completed even if warranty
is not fulfilled.
 In case of breach of
warranty, the buyer cannot
put an end to the contract
He can only claim damages
from the seller.
 A breach of warranty cannot
be treated as a breach of
condition.

23. Doctrine of Caveat Emptor
[Sec 16]
 The doctrine of caveat emptor is a
fundamental principle of law of sale of
goods. It means ‘Caution Buyer’ i.e. ‘let
the buyer beware’. In other words, it is
no part of the seller’s duty to point out
defects in his own goods. The buyer
must inspect the goods to find out if they
will suit his purpose e.g. certain pigs are
sold ‘subject to all faults’. These pigs
being infected cause typhoid to the other
healthy pigs of the buyer. The rule of
caveat emptor would apply.

24. Exceptions to the Doctrine of
Caveat Emptor
 Condition as to Quality or Fitness for
Buyer’s purpose.
 Where the seller makes a false
representation or obtains consent of
the buyer by fraud.
 Condition as to Merchantability.
 Condition as to Wholesomeness.
 Condition implied by the Custom or
Trade Usage