Introduction Definition of contract of sale Essential elements of contract of sale Formalities of contract of sale Sale & Agreement to sell Difference between sale & agreement to sale Goods and their classification Price Condition & warranties Unpaid seller Rights of unpaid seller

2. Sales of goods Act,1930

3. :
I would like to express my special thanks of gratitude
to my teacher (Pragya Bhargav Ma’am) who gave me
the golden opportunity to do this wonderful project on
the topic (Sales of goods act,1930),which also helped
me in doing a lot of Research and I came to know
about so many new things I am really thankful to them.
Secondly I would also like to thank my parents who
helped me a lot in finalizing this project within the
limited time frame.

4. • Introduction
• Definition of contract of sale
• Essential elements of contract of sale
• Formalities of contract of sale
• Sale & Agreement to sell
• Difference between sale & agreement to sale
• Goods and their classification
• Price
• Condition & warranties
• Unpaid seller
• Rights of unpaid seller

5. • In 1930, section 76 to 123 of contract act was repealed
and a separate act known as “Sales of goodsact, 1930” was
passed.
• This act come into force on 1July, 1930.
• This act covers only moveable property.
• This act is applicable in al over India, except Jammu &
Kashmir.
Sales of
goods act,
1930

6. Sec.
4
Sales of
goods act,
1930

7. • Two parties(seller & buyer).
• Goods (only moveable goods).
• Price: price means money consideration for sale of
goods.
• Transfer of property (only general property).
• Free consent.
• Absolute or conditional.
• Sale or agreement to sell.
• Other essential elements of valid contract .
Sec.4
Sales of
goods act,
1930

8. • Offer to buy or sale: to make a contract of sale there
must be a valid offer to buy or sell [Sec.5(1)].
• Goods: there must be goods for contract of sale. “Goods
means any kind of moveable property”.
• Price: the offer to buy or sell of goods must be for price
[Sec.5(1)].
• Acceptance: there must be valid acceptance to the offer
of buy or sell the goods. The acceptance must be
unqualified.
• Delivery: the contract for sale may provide for :-
immediate delivery of goods; delivery in installments;
delivery at future date. The delivery of goods may be
postponed at the request of buyer or seller.
Sec.5
Sales of
goods act,
1930

9. • Payment of price: the contract of sale may provide:- for
immediate payment of price; for payment in installment or
for payment in future.
• Written, oral or implied: a contract of sale may be made
in writing or oral or implied.
Sales of
goods act,
1930

10. • Sale:“sec.4(3),where under a contract of sale the property in the
goods is transferred from the seller to the buyer.
Fore.g.:A sells his scooty to B for Rs.20,000. it is sale since the
ownership of scooty has been transferred from A to B.
• Agreement to sell:sec.4(3),where 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.
Fore.g.:L agrees to sell certain goods to M. The goods are on the
way from London to Bombay in a ship. This is an agreement to
sell because the property in goods will pass to buyer when the
goods come and the agreement is subject to condition that the
ship arrives in-port with the goods.

11. S.
no.
BASIS SALE AGREEMENT TO SELL
1 Nature Executed contract Executory contract
2 Transfer of
ownership
Immediately transferred On future date or on
fulfillment of condition of
agreement to sell.
3 Types of goods Existing & specific goods Usually future or contingent
goods. Sometime,
unascertained existing
goods.
4 Risk of loss Risk passes with
ownership.
Seller bears risk even
though the goods are in
possession of the buyer.

12. • ‘Goods’ means every kind of moveable property other
than actionable claim or money.
• Moveable property are:-
 Share
 Growing crops, Grass
 Land
 Metal & stone
 Interest of a partner
 Goodwill, patents, copyright
 Water, gas, electricity
 Foreign currency
 Vegetable, fruits
 Fixture & building
 Shares before & after allotment, Debenture after allotment
 Old coins or old notes which have ceased to be legal
tender

14. • Goods owned or possessed by the seller at the time of contract
of sale are known as existing goods.
For e.g.:- A has five bikes in his showroom for sale. The bike
are existing goods owned possessed by him.
• The existing goods further divided into:-
Specific goods: those goods which are identified and agreed
upon at the time of contract of sale is made.
Ascertained goods: normally, the term specific & ascertained
goods are used for same kind of goods. But the term
ascertained goods is used to denote the goods which is
ascertained after formation of contract of sale.
Unascertained or generic goods: the goods which are not
identified and agreed upon at the time of making of contract of
sale. For
e.g.: A has showroom of cars. From 50 cars, A want to
sell any one of them . So here, the goods is unascertained.

15. • Those goods are to be manufactured or produce or acquired by
the seller after making of contract of sale.
• For e.g.:- farmer agrees to sell future crop of a particular
agricultural field in the next season. This is an agreement to sell
future goods.
• The contract of sale of future goods, it is an ‘agreement to sell’
not a ‘sale’.
S.
no
FUTURE GOODS EXISTING GOODS
1. Do not exist at the time of contract
of sale.
Exists at the time of contract of sale.
2. Neither owned nor possessed by
seller at the time of sale.
Owned or possessed by seller at
time of sale.
3. Agreement to sell. Sale or agreement to sell.

16. • Contingent goods are the goods, acquisition of which
depends upon the happening or non-happening of a
contingency, i.e. contingent event.
• Contingent goods is a part of future goods.
• For e.g. :- C agrees to sell to D a certain paintings only if
A, its present owner, sells it to him, C.

17. • A document of title of goods means any document which
is used in the ordinary course of business as proof of
possession or control of goods.
• Types of document:-
a. Bill of lading
b. Dock-Warrant
c. Warehouse-keeper’s certificate
d. Wharfinger’s certificate
e. Railway receipt
f. Delivery warrant or order

18. • Price means the money consideration for sale of
goods.
Modes of determination of price:-
By contract of sale.
By mutual understanding of parties.
By government.
Reasonable price.
By third party.
Sec.
2(10)

19. • In a contract of sale, parties make certain stipulations,
i.e., agree to certain terms regarding the quality of the
goods, the price and the mode of its payment, the
delivery of goods and its time and place
• All stipulations cannot be treated as the same.
• Some may be intended by the parties to be of a
fundamental nature, e.g.. Quality of the goods to be
supplied, the breach of which therefore will be regarded
as a breach of the contract
• Some may be intended by the parties to be binding, but
of a subsidiary or inferior character, e.g.., time of
payment, so that a breach of these terms will not put an
end to the contract but will make the party committing the
breach liable to damages.
• The former stipulations are called ‘conditions’ and the
latter ‘warranties’.
Sec.11-17

20. • A condition is stipulation essential to the main purpose of
the contract and breach of a condition by the party
entitles the other party to treat the contract repudiated.
• For e.g. :- Anta bought a car from Banta, a car dealer,
on a condition that car would be suitable for touring in
hilly areas. The car was found to be unfit for touring in
hilly areas. Here, the suitability of car for touring purpose
was a condition of the contract. Anta, therefore was
entitled to repudiate the contract and return the car and
have refund of price paid.

21. • A warranty is a stipulation collateral to the main purpose
of the contract, the breach of which gives rise to claim for
damages but not to a right to reject the goods and treat
the contract as repudiated.
• For e.g. :- Anta buys a car from Santa, a car dealer. The
car is guaranteed against any manufacturing defect for a
period of one year from date of its purchase. After one
month, Anta finds that the clutch system is defective.
Anta can get the clutch system repaired or replaced from
the dealer. If the dealer fails to do so, Anta can claim the
amount spent in repairing or replacing the clutch system.
But, Anta cannot repudiate the contract of purchase of
car because the guarantee was in the nature of warranty.

22. S. no Basis Condition Warranty
1. Nature Essential Collateral
2. Significance If conditions fails then
contract also fails
No failure of contract
3. Consequences of
breach
Contract is repudiated
by aggrieved party
No contract is repudiated
but can claim damages
4. Treatment A breach of condition
may be treated as a
breach of warranty
A breach of warranty
cannot treated as breach
of condition

23. • Repudiation of contract
• Rejects the goods
• Waive the condition
• Option to treat condition as warranty and claim damages
• Compulsion to treat condition as warranty and to claim
damages
• No remedy when the seller is excused by law.

24. • Claim for damages
• Right of diminution or extinction of price: the
buyer may diminish (reduce) or extinct the price
of goods by the amount of damages.
• Refuse to pay price by buyer if loss equals or
more than price
• Buyer may sue for excess loss

25. • Express condition : those which are expressly agreed
upon by parties and provided in contract of sale.
• Implied condition : those which are implied by law or
imposed by law on seller. (sec. 14-17)
• There are following types of implied condition:-
a. Condition as to title [sec.14(a)]
b. Condition as to description
c. Condition as to quality & fitness
d. Condition as to sample
e. Condition as to merchantable quality
f. Condition as to wholesomeness
g. Condition implied by custom

26. • Express warranty
• Implied warranty:-
i. Warranty as quiet possession of goods
ii. Warranty as to freedom from charge
iii. Warranty as to quality or fitness by usage of trade
iv. Warranty to disclose dangerous nature of goods

27. • An unpaid seller of goods is a person who has
not been paid the whole price or to whom whole
price has not been tendered.
• The term “seller” includes any person who is in
the position of a seller, e.g. an agent of seller
etc….

28. • The rights of unpaid seller can be classified
under two categories:
I. Right against goods.
II. Right against buyer personally.
contd….

29. • Right of lien : The word ‘lien’ means “to retain possession
of goods” until some claim due against it is satisfied. So
unpaid seller has right to lien.
• Right of stoppage of goods in transit : it means an unpaid
seller stop further transit of the goods with a view to
regain actual or constructive possession of the goods till
the price is paid.
• Right of re-sale : the unpaid seller has a right to re-sale
the goods sold by him in the following three cases:
i. where goods are of perishable nature.
ii. when notice is given but the buyer does not pay.
iii. when seller expressly reserves a right to re-sale.

30. • He may sue for price.[sec.55(1)]
• He may sue for damages for non-acceptance of
the goods.(sec.56)
• He may sue for repudiation of the
contract.(sec.60)
• He may sue for interest on the amount of
goods.[sec.61(2)]

32. Prepared by :
Yamini Kahaliya
BBA (Honors’)