The document provides an overview of the Sales of Goods Act of 1930 in India. Some key points: - The Act regulates contracts for the sale of goods and defines a contract of sale as one where the seller transfers property in goods to the buyer for a price. - For a contract of sale to be valid, there must be two parties, a transfer of ownership of goods, the subject matter must be goods as defined by the Act, and consideration in the form of a price. - The Act establishes rules regarding essential elements of a contract, different types of goods, passing of property, delivery procedures, duties of buyers and sellers, and rights of unpaid sellers including lien, stoppage of goods, and

1. Sales of Goods Act, 1930

2. Overview of Management
Learning outcomes
• Introduction of sales of goods act,1930
• Understand essential for contract

3. Overview of Management
Introduction
• Transactions in the nature of sale of goods
form the subject matter of the Sale of
Goods Act, 1930
• The Act came into force on 1 July, 1930
• It extends to the whole of India, except
Jammu & Kashmir
• This chapter deals with the specific types
of contract, i.e., sale of goods

4. Overview of Management
Definition
Section 4 defines a contract of sale as “a
contract whereby a seller transfers or
agrees to transfer the property in goods to
the buyer for a price”

5. Overview of Management
ESSENTIALS OF A CONTRACT OF
SALE
• There must be at least two parties: a sale has
to be bilateral because the property in goods
has to pass from one person to another. The
seller and the buyer must be different persons
• Transfer or agreement to transfer the
ownership of goods: In a contract of sale, it is
the ownership that is transferred (in the case of
sale), or agreed to be transferred (in the case of
agreement to sell), as against transfer of mere
possession

6. Overview of Management
ESSENTIALS…….contd
• The subject matter of the contract must
necessarily be goods: the sale of immovable
property is not covered under Sale of Goods Act.
• Price is the consideration of the contract of
sale: the consideration in a contract of sale has
necessarily to be ‘money’, (i.e. the legal tender
money).

7. Overview of Management
ESSENTIALS…….contd
• All other essentials of a valid contract as per
the Indian Contract Act, 1872 must be
present: the parties to the contract must be
competent ot contract, the consent of the parties
must be free, the object of the contract must be
lawful and so on.

8. Overview of Management
SALE AND AGREEMENT TO
SELL
• Property in the goods is transferred from
the seller to the buyer
- SALE
• Transfer of the property in the goods is to
be taken place at some future date or after
fulfillment of some condition,
-AGREEMENT TO SALE

9. Overview of Management
SALE AND AGREEMENT
TO SELL
Sale
1. Ownership is with the
buyer
2. Executed contract
3. Sue for price, in case of
breach
4. Goods lost by accident
then loss falls on the
buyer.
Agreement to sell
1. Ownership is with the
seller
2. Executory contract
3. Sue for damages only,
in case of breach
4. Goods lost by accident
then loss falls on the
Seller.

10. Overview of Management
WHAT IS GOOD
• ‘Goods’ means 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 be severed before
sale or under the contract of sale
• Trademarks, patents, copyright, goodwill, water,
gas, electricity are all goods
• In general, it is only the movables that form
goods

11. Overview of Management
• The term goods excludes money
• Money means legal tender and not the
rare coins which can be sold and
purchased as goods
• Money itself cannot be subject of a sale
• The actionable claims are things which a
person cannot make use of, but which can
be claimed by him by means of a legal
action

12. Overview of Management
Classification of goods
1. Existing Goods
1. Specific or ascertained
2. Generic and unascertained
2. Future
3. Contingent

13. Overview of Management
• Existing goods are those which are owned
or possessed by the seller at the time of the
contract
– Generic or unascertained goods are goods
indicated by description and not specifically
identified
– Specific goods means goods identified and agreed
upon at the time a contract of sale is made
• Contingent goods are the goods the
acquisition of which by the seller depends upon
a contingency which may or may not happen.
Contingent goods is a part of future goods
• Future goods means goods to be
manufactured or produced or acquired by the
seller after making the contract of sale

14. Overview of Management
Effect of Perishing of Goods [Sec 7]
• A contract for the sale of specific goods is void
if the goods have perished at the time of
contract.
• Contract is void ab initio if the goods perished
before the formation of contract.
• In agreement to sell it becomes void if
subsequently the goods have perished before
the risk passes to the buyer.

15. Overview of Management
The Price
• Price means the money consideration for a sale of
goods. [Sec 2(10)]
• Price can be fixed in the following ways :
– by the contract or terms of agreement, or
– may be determined by course of dealing between the
parties.
– It may be the price prevailing on a particular day, or
– price to be fixed by a third party.
• When price is not capable of being fixed by any of
the above modes, the buyer shall pay the seller a
reasonable price.

16. Overview of Management
Conditions and Warranties
• As a general rule, a person buying something, is
duty bound to see whether that thing suits his
propose.
• This is called the doctrine of caveat emptor.
• When a seller gives an express assurance
regarding the product, he is bound to honour that.
• Law presumes that product should meet certain
minimum standards,
• breach of which has the same effect as the breach
of express assurances or stipulations.
• Such legal presumptions are called implied
conditions and warranties.

17. Overview of Management
Express & Implied Conditions & Warranties
Express condition or warranty:
These may be of any kind that the parties may
choose to agree upon, eg, it may be agreed that
delivery of goods shall be made or taken on or before
a certain date. Similarly, in a contract of sale of a car,
express warranty as to its soundness may be
incorporated
Implied conditions and warranties:
They are deemed to be incorporated by law in every
contract of sale of goods unless the terms of the
contract show a contrary intention

18. Overview of Management
• Implied Conditions
A condition is a stipulation essential to the
main purpose of the contract, the breach of
which gives rise to a right to treat the
contract as repudiated. [Sec 12(12)]
• Implied Warranties
A warranty is a stipulation collateral to the
main purpose of the contract, breach of
which gives rise to a claim for damages, but
not a right to reject the goods and treat the
contract as repudiated. [Sec 12(3)]

19. Overview of Management
Types of Implied Conditions
a)Condition as to title
b)Sale by description
c)Sale by Sample
d)Sale by description as well as sample
e)Condition as to fitness or quality
f) Condition as to Merchantability
g)Conditions implied by trade usage
h)Condition as to wholesomeness
i) Marketability

20. Overview of Management
Doctrine of caveat emptor
Caveat Emptor. Latin for "let the buyer beware."
A doctrine that often places on buyers the
burden to reasonably examine property before
purchase and take responsibility for its condition.
Especially applicable to items that are not
covered under a strict warranty. While
purchasing goods buyer must be very careful, at
his own interest, buyer has to select such goods
only which are not of defective nature. In case
where buyer, negligently purchases defective
goods, he cannot repudiate the contract of sale.
It is caveat emptor law.

21. Overview of Management
Exceptions of Rule [Sec16]
• Where the seller makes a misrepresentation of
fact;
• where the seller actively conceals a defect in the
goods;
• where goods are supplied by description and they
do not corresponds with the description;
• where the goods are supplied by description and
they are not of merchantability quality;
• when goods are sold by sample, and the goods do
not correspond with the sample

22. Overview of Management
• when the goods are sold by sample as well as
description, and the bulk of the goods do not
match either the sample or description, or
both;
• where the buyer relies upon the skill and
judgement of the seller;
• where trade usages or customs implies some
condition or warranty and the seller deviates
from that.

23. Overview of Management
Implied Warranties
• Warranties as to Quite Possession.
• Warranties as to free from encumbrance.
• Warranty as to disclosure of dangerous nature of
the goods.
• Warranty implied by customs.
• Conditions reduced to Warranty.
• Waiver by Buyer.
• Acceptance of the goods by the buyer.

24. Overview of Management
Passing of Property
• Transfer of property in the goods to the buyer is
the main object .
• The significance of transfer of property is that risk
travels with property.
• After the formation of the contract but before the
delivery of goods the questions regarding the
rights and obligation are very crucial in the wake of
risk of loss being associated with property.

25. Overview of Management
Effect of Passing of Property
• 1. Risk Travels with Property
• 2. Action against third parties
• 3. Insolvency of seller or buyer
• 4. Seller's right for price

26. Overview of Management
Rules regarding Passing of property
• Goods must be specific or ascertained.
• Property passes when intended to pass.
Sale of Specific Goods
– Passing of property at the time of contract.
– Goods to be put in deliverable state.
– Goods to be weighed or measured for
ascertaining their price.
– Sale on approval.

27. Overview of Management
Reservation of right of disposal
• The seller may reserve the right of disposal until
certain conditions are fulfilled.
• Where buyer is to pay for the goods before
delivery,
• Where by the BoL or R/R, the goods are
deliverable to the order of the seller or his agent,
• Where the seller draws a BoE and send the same
along with the BoL or R/R to secure buyer's
acceptance or payment.
• The property in the goods does not pass to the
buyer until the conditions are fulfilled.

28. Sales of Goods Act, 1930
performance of contract

29. Overview of Management
Learning Outcomes
• Understand how performance of contract
take place
• Define condition fulfillment of contract
• Explain Remedies of breach of contract
• Define Right of unpaid seller
• Define Right of buyer

30. Overview of Management
Performance of Contract
• It is the duty of the seller to deliver the goods and
of the buyer to accept and pay for them. [Sec 31]
• Unless otherwise agreed, delivery of the goods
and payment of the price are concurrent
conditions. [Sec 32]
• Delivery may be made by doing anything that
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. [Sec 33]

31. Overview of Management
RULES OF DELIVERY
• Mode of delivery
• Delivery and payment
con current condition
• Effects of part
delivery
• Buyer to apply for
delivery
• Place of delivery
• Time of delivery
• Goods in possession
of a third party
• Cost of delivery
• Delivery of wrong
quantity
• Installment deliveries

32. Overview of Management
Modes of Delivery
• Actual Delivery
• Constructive Delivery
– seller in possession of goods after sale agrees
to hold them on behalf of the buyer; or
– buyer is in possession of the goods and the
seller agrees to his holding the goods as owner;
or
– a third person in possession of goods
acknowledges to the buyer that he is holding
them on his behalf.
• c) Symbolic Delivery

33. Overview of Management
Duty of buyer to apply for delivery
• In the absence of any express contract, the seller
of goods is not bound to deliver them unless the
buyer applies for delivery. [Section 35]
• Even when the goods are to be acquired by the
seller, and when they are acquired, and the seller
notifies the buyer that the goods are in his
possession, the buyer must apply for the delivery.
• The buyer has no cause of action against the
seller if he does not apply for delivery, unless
otherwise agreed.

34. Overview of Management
Place of Delivery
• The place of delivery of goods may be specified in
the contract itself.
• Where no place is specified in the contract
– in case of sale, goods sold are to be delivered
at the place at which they are at the time of
sale,
– in case of an agreement to sale, goods are to
be delivered at the place at which they are at
the time of the agreement to sell,
– if at the time of agreement to sell the goods are
not in existence, they are to be delivered at the
place where they are manufactured or
produced.

35. Overview of Management
• Where the goods are in the possession of a
third person, there is no delivery by seller to
buyer until such person acknowledges to the
buyer that he holds the goods on his behalf.
• Unless otherwise agreed, the expenses of and
incidental to putting the goods into a deliverable
state shall be borne by the seller.

36. Overview of Management
Delivery to Carrier
• Delivery of the goods to a carrier is deemed to be a
delivery to buyer.
• The seller shall make such contract with the carrier on
buyer's behalf as may be reasonable having regard to
the nature of goods and other circumstances.
• If the seller omit to do so, and the goods are lost or
damaged, the buyer may decline the delivery to
himself.
• Where goods are sent by sea, the seller shall give
notice to the buyer to enable him to insure them, if he
fails to do so, the goods shall be deemed to be at his
risk.

37. Overview of Management
FREE ON BOARD
Seller’s duties:
• To deliver the goods on
board the ship named by
the buyer
• Once goods are put on
board the ship, they are
at the risk of the buyer.
• The duty of the seller
ends when he delivers
the goods to the ship at
the port of shipment.
BUYER’S DUTY:
• Arrange for the contract
of affreightment (rent of
ship)
• Name the ship on which
goods are to be
delivered.
• It becomes the duty of the
buyer once the goods are
on the ship.

38. Overview of Management
COST, INSURANCE, FREIGHT
Seller’s duty:
• Make out an invoice
of the goods sold.
• Procure a contract of
affreightment.
• To arrange for an
insurance.
Buyer’s duty
• To pay unloading
charges, wharf age
charges, etc.
• To pay custom and
import duties.

39. Overview of Management
Delivery in wrong quantity [Sec 37]
• Short delivery
• Excess delivery
• Delivery of mixed goods
• Installment deliveries

40. Overview of Management
Duties of the buyer
• Duty to accept the goods and pay for them in
exchange of possession.
• Duty to apply for delivery of goods.
• Duty to demand delivery at a reasonable hour.
• Duty to accept installment delivery and pay for it.
• Duty to take risk of deterioration in the course of
transit.
• Duty to intimate the seller where he rejects the
goods.
• Duty to take delivery.
• Duty to pay the price.
• Duty to pay damages for non-acceptance.

41. Overview of Management
Rights of unpaid seller
Against the
goods
Against the
Buyer
personallyWhere the
property in
the goods has
not passed
Where the
property in
the goods has
passed
Lien
Stoppage in
transit
Re sale
With
holding
delivery
Stoppage in
transit
Suit for price
Repudiation of
contract
Suit for
damages
Suit for
interest

42. Overview of Management
Unpaid Seller
• The seller of goods is deemed to be an
"unpaid" seller –
• when the whole of the price has not been paid
or tendered; or
• when a bill of exchange or other negotiable
instruments has been received as conditional
payment, the conditions has not been fulfilled
by reason of the dishonour of the instrument or
otherwise. [Sec 45(1)]

43. Overview of Management
Rights of Unpaid Seller
• Notwithstanding that the property in the goods
may have passed to the buyer, the unpaid
seller, has, by implication of law-
• a) a lien on the goods for price while he is in
possession of them;
• b) in case of insolvency of the buyer a right of
stopping the goods in transit; and
• c) a right of resale. [Sec 45(1)]

44. Overview of Management
Rights against goods
• 1. Unpaid Seller's Lien [Sec 47]
• a) where the goods have been sold without
stipulation as to credit; or
• b) where the goods have been sold on credit, but
terms of credit has expired; or
• c) where the buyer becomes insolvent.
• The right of lien exists only for the price of the
goods. Where part delivery of the goods has been
made, he may exercise his right of lien on the
remainder.

45. Overview of Management
Termination of lien [Section 49]
• When he delivers the goods to a carrier or
other bailee for transmission to the buyer
without reserving the right of disposal;
• when the buyer or his agent lawfully obtain
possession of the goods; and
• by waiver thereof.

46. Overview of Management
Right of Stoppage in Transit
Delivery to buyer
• Goods are deemed to be in course of transit from
the time when they are delivered to a carrier or a
bailee, until the buyer or his agent takes delivery.
• The transit ends when the buyer or his agent
takes delivery of the goods from the carrier before
their arrival at the appointed destination.
Acknowledgement to buyer
• When the goods have arrived at their destination
and the carrier acknowledges to the buyer or his
agent that he is now holding the goods on his
behalf, the transit is at the end.

47. Overview of Management
Rejection by buyer
• If the goods are rejected by the buyer, and the
carrier or other bailee continues in possession of
them, the transit is not at an end.
Wrongful refusal to deliver
• Where the carrier wrongfully refuses to deliver the
goods to the buyer or his agent, the transit is at an
end.
Part delivery
• Where the goods have been delivered in part, the
seller may stop the remainder of the goods, unless
the part delivery shows an agreement to give up
the possession of the whole.

48. Overview of Management
When transit comes to an end
• When the buyer or his agent takes delivery of the
goods from the carrier before their arrival at the
destination.
• When the goods have arrived at their destination and
the carrier acknowledges to buyer or his agent.
• Where the goods are delivered to a ship chartered by
the buyer, the carrier is the agent of the buyer.
• Where the carrier wrongfully refuses to deliver the
goods to the buyer or his agent.

49. Overview of Management
Right of resale [Sec 54]
• A contract of sale is not rescinded by mere
exercise of right of lien or stoppage in transit.
• Where the unpaid seller gives notice to the buyer
of his intention to resell, he may resell the goods
and recovers from the buyer damages for any loss.
• If no notice is given, the unpaid seller is not entitled
to recover damages and the buyer shall be entitled
to the profit.
• Where the seller reserves a right of resale and
sells the goods, the original contract is thereby
rescinded, but without prejudice to any claim by the
seller.

50. Overview of Management
Seller's remedies against Buyer
• Suit for price.
• Damages for non-acceptance.
• Damages are assessed as follows:
• Where the goods have a ready market, the buyer
has to pay the loss that the seller has sustained on
reselling the goods.
• If the seller does not resell the goods, the
difference between the contract and market price
on the day of breach is the measure of damages.
• Where the goods are deliverable by installments,
the difference in prices is to be reckoned on the
day that a particular installment was to be
delivered.

51. Overview of Management
Buyer's Remedies against Seller
• 1. Damages for non-delivery.
• 2. Remedy for breach of warranty.
• 3. Specific Performance.
• 4. Anticipatory breach.
• 5. Recovery of interest.

52. Overview of Management
Auction Sales [Sec 64]
• An auction sale is complete when the auctioneer
announces its completion by the fall of the hammer.
• The bidder can withdraw before the acceptance of
his bid and his security amount cannot be forfeited.
• The law does not prevent the seller from bidding
provided he expressly reserve the right to bid.
• If the seller appoint a puffers (persons who make
bids in order to prompt bidding at higher prices), the
sale is voidable at the option of the buyer.
• Auction subject to a reserve or upset price means
a price below which the auctioneer will not sell.

53. Overview of Management
Knock out Agreement
• An agreement among bidders not to bid
against each other.
• It is a combination to prevent competition inter
se.
• An arrangement that only one of them will bid
and dispose of anything so obtained privately
among themselves.
• Not illegal per se but if the intention is to
defraud a third party then knock out is illegal.

54. Overview of Management
Damping
• An unlawful act discouraging the intending
purchaser from bidding –
• by pointing out defects in the goods in the
auction sale; or
• by taking away the intending purchaser from
the place of auction by some other method.
• Damping is illegal and the auctioneer is
entitled to withdraw the goods from the
auction.