This document discusses key concepts relating to the law of sale of goods in Nepal and India. It defines a sale of goods contract and outlines its essential elements such as two parties, movable goods, a price, and transfer of ownership. The document also covers important terms and conditions in a sale like conditions, warranties, implied conditions, transfer of title, unpaid sellers' rights, and performance through delivery and payment. Overall, the document provides a comprehensive overview of the legal framework and principles governing contracts for the sale of goods.

1. LAW RELATING TO SALE OF
GOODS
 a legal contract of an exchange of goods, services or property from seller or vendor
to buyer or purchaser.
 legal contract in which ownership of goods gets transfer from seller to buyer against
a price.
 The truncation of purchase and sales of goods is normally and important activities in
business.
 scope of contract of sale of goods is ranging from national to international level.
 It is considered as the back bone of national and international business.
 Contract act 2056 has separate precision from section 40 to 55 related to sales of
goods

2. Definitions
 According to section 40 (1) of Nepal Contract act
2056 “ a contract of sale of goods shall be
deemed to have been concluded in one case a
seller agrees to handover any goods to the buyer
immediately or in future by receiving the price of
that goods”.
 According to section 4 (1) of Indian Sale of
Goods Act 1930, “A contract where by the seller
transfers the property in goods to the buyer for a
price.”

3. FEATURES/ESSENTIAL ELEMENT
OF CONTRACT OF SALE OF
GOODS:
Two parties:
Movable goods or property:
Price:
Transfer of ownership:
Verbal or written consent:
Term of contract
Essentials of a valid contract:
Include sale and agreement to sell:

4. Difference between sale and
Agreement to sell
1. Nature of contract:
2. Transfer of ownership
3. Transfer of risk:
4. Right against each other:
5. Right of seller to resale:
6. In the case of insolvency of seller:
7. In case of insolvency of buyer:
8. Responsibility of loss:
9. Types of goods:

5. GOODS
 goods can be movable or immovable.
 contract of sale of goods every kind of movable goods
or property.
 Anything transferred from seller to buyer against price.
 goods are things that are produced to be sold.
 property like machinery, vehicles, furniture, books etc.

6. TYPES OF
GOODS
Existing goods:
i. Specific or ascertained goods:
ii. General or unascertained goods:
Future goods:
Contingent goods:

7. CONDITION AND WARRANTIES_
 In the contract of sale of goods the seller and buyer fix or
maintain various terms.
 terms regarding the quality, quantity, price of goods, Mode of
payment, delivery etc.
 Those term which are vital and major and affect whole structure
of contract of sale of goods are called conditions.
 those which are not vital and major but collateral or secondary
and affect a part of contract of sale of goods are called
warranty.

8. CONDITION
 the factor or stipulation that directly affects the
contract of sale.
 the major term of the main purpose or subject
matter of the contract.
 primary term and non-fulfillment of these terms can
result breach of contract.
 Section 12 of Indian sale of goods act 1930, “a
condition is a stipulation essential to the main
purpose of contract the breach of which gives rise
to a right to treat a contract as repudiate.”

9. TYPES OF
CONDITION
1. Expressed condition:
2. Implied condition: Nepal contract act 2056 section 44-47
i. Sale by description: (NCA 2056, sec. 44(1))
ii. Condition as to the title of goods: (NCA2056, 45 (1))
iii. Condition as to fitness or quality of goods: (NCA2056, 46 (1))
iv. Condition as to merchantability:(NCA2056, 46 (1))
v. Condition in a sale by sample: (NCA2056, 47 (2))
vi. Condition as to wholesomeness: (NCA2056, 46 (3))

10. WARRANTY
 stipulation which is secondary or related to the main purpose of
the contract.
 stipulation to support the main purpose of the contract.
 breach of warranty in the contract the aggrieved party only
claim for the compensation or loss.
 Nepalese Contract act 2056 is silent about the term warranty.
 According to section 12 (3) of Indian sales of goods act 1930,
“A warranty is stipulation collateral to the main purpose of the
contract the breach of which gives rise a right to claim for
damages but not a right to reject the goods and treat the
contract as repudiated.

11. TYPES OF
WARRANTY
 Expressed warranty:
 Implied warranty:
i. Warranty as to quiet possession -zflGtk"0f{ ef]u ;DalGw cfZjf;g_M
ii. Warranty of freedom from encumbrances –bfjL/lxt ;DalGw cfZjf;g
iii. Warranty of disclosing the danger nature of goods:
iv. Fitness of goods as per the expected purpose:

12. DIFFERENCE BETWEEN CONDITION
AND WARRANTY
Nature: (primary or secondary)
Possibility of contract:
Right to terminate or claim
Performance of contract in the
case of breach of contract.
Affects Whole or partial.
Liability

13. DOCTRINE OF CAVEAT EMPTOR -
qm]tfsf] ;fjwfgL ;DalGw l;4fGt_
 Latin term literally means, “let the buyer beware”.
 This indicates the buyer should be aware.
 weather the goods purchased are up to the standard
or not or goods are up to the quality to suit the main
purpose.
 What types of goods buyer needs he only knows not
the seller.
 inspect the goods prior to purchase.
 Buyer should relied on his knowledge, skill and
judgement.

14. Exception of caveat
emptor
On disclosing of the objective of purchase.
Where goods are sold by description.
Where goods are sold by sample.
Where goods aren’t merchantable.
In case of defect of goods can’t be easily
discovered.
Where seller makes misrepresentation.

15. TRANSFER OF
OWNERSHIP
 A contract of sales of goods is transfer of
ownership of the goods .
 It is the main objective of the contract of sale of
goods.
 transfer of ownership of the goods from seller to
the buyer .
 transfer of ownership of the goods from seller to
the buyer against price.

16. Reason for transfer of
ownership
Risk passes with
ownership:
Action against third party:
Insolvency of seller:
Seller’s right for price:

17. RULES REGARDING TRANSFER
OF OWNERSHIP
(section 48 – 53 of Nepal contract act 2056)
 Transfer of ownership of specific goods:
 Where goods are to be delivered:
 When goods are in deliverable state and can be dispatched immediately:
 If the seller has to do something for putting the goods in deliverable state:
 It the goods are to be measured weighted:
 It the goods are to be measured weighted:
 To send bill and other related documents to the buyer:
 Delivery to the carrier:
 Goods send on approval or on sale or return basic:
 Unascertained and future goods:

18. TRANSFER OF TITLE BY
NON-OWNER
 Sale by a mercantile agent:
 Sale by one of joint owners:
 Sale by person in possession under voidable
contract:
 Transfer of title by estoppel:
 Sale in a market overt:
 Sale by an official appointed by the court:
 Resale by an unpaid seller:

19. UNPAID
SELLER Under sale two things play a tremendous role i.e. goods and price.
 buyer pays the price for the goods and seller receives the price.
 seller who has not received the payment from buyer.
 sellers who are not paid are unpaid sellers.
 According to section 45 of Indian act 1930 “the seller is deemed to be an
unpaid seller, when the whole of the price has not been paid, when the
conditional payment was made by a bill of exchange or other negotiable
instrument and the same has been dishonored”.
 The seller become unpaid seller as soon as he does not get cash value for
his goods from the buyer in time mentioned in the contract.

20. FEATURES/CHARACTERISTICS OF
UNPAID SELLER
 The seller must not have yet got the price of the goods.
 The seller must have not got whole or partial price.
 due to dishonor of negotiable instrument.
 The seller must not have refused to accept the whole price.

21. RIGHTS OF AN
UNPAID SELLER
1. Rights against the goods:
i. Sellers or venders lien:
ii. Right to stoppage of goods in transit:
iii. Right to resale:
2. Right against the buyer personally:
i. Right to suit for price:
ii. Right to suit for damages for non-acceptance:
iii. Right of suit for damage in case of repudiation:
iv. Suit for interest:

22. PERFORMANCE OF A
CONTACT OF SALE OF
GOODS
Three main processes of the performance
of contract of sale of goods:
Voluntary transfer or delivery of goods
Acceptance of the goods by the buyer
Payment of price of goods

23. DELIVERY
 the voluntary transfer physical possession or
control of goods.
 goods or things moving and handover one person
to another and one place to another place.
 Delivery of goods may be made in any one of the
following modes.
i. Actual delivery:
ii. Symbolic delivery:
iii. Constructive delivery:

24. RULE AND REGARDING OF
DELIVERY OF GOODS
 Delivery and payment with concurrent
condition:
 Time of delivery:
 Expenses of delivery:
 Delivery of wrong quantity:
 Buyer to apply for delivery:
 Delivery to carrier:
 Installment delivery:
 Rejected goods: