UNIT -2

Course

THE SALE OF GOODS ACT, 1930

a)Contract o Sales, Meaning and difference between sale and agreement to sale
b) Conditions and Warranties
c) Transfer of Ownership in goods including sale by non-owners
d)Performance of contract of sale
e) Unpaid seller- meaning and rights of an unpaid seller against the goods and the buyer.

 This act extends to whole of India.

 This act came into force w.e.f. 1 July 1930.
 The ‘contract of sale’ includes both a sale as sell as an agreement to sell.
 The word Indian was omitted the title of the Act in 1963 (22 sept.)
 This Act does not deal with the sale of immovable property.
 The transaction relating to immovable properties, e.g., the sale, lease, gifts, etc., are governed by
a separate Act known as ‘Transfer of Property Act, 1882’.

DEFINITIONS (Sec. 2)

Buyer – Sec 2 (1)

A person, who buys or agrees to buy the goods.

Delivery Sec (2)

It means voluntary transfer of possession from one person to another.

Delivery State Sec 2(3)

Goods are said to be in delivered state, when they are in such state that the Buyer
would be bound to take the delivery of them in accordance with the contract.

Documents of title to Goods 2(4)

A document of the title to goods may be described as any document used as proof of the
possession or control of goods, authorizing or purporting to authorize, either by
endorsement or by delivery, the possessor of the document to transfer or receive goods
thereby represented.

Section 2(4) of the Sale of Goods Act, 1930 recognizes the following as documents of
title to goods:

(i) Bill of lading,

(ii) Dock warrant,

(iii) Warehousekeeper’s certificate,

(iv) Wharfing’s certificate,

(v) Railway receipt,

(vi) Multi – modal transport document,

(vii) Warrant or order for the delivery of goods, and

(viii) Any other document used in the ordinary course of business as document of title .

Goods – Sec 2 (7)

Goods mean every kind of movable property.

Other than actionable claims and money, and it includes.

Stock and shares, growing crops, grass and things attached to or forming part of land
which are agreed to be severed before sale or under the contract of sale.

‘Money’ means the legal tender. ‘Money’ does not include old coins and foreign
currency. They can, therefore, be sold or bought as goods. Sale and purchase of foreign
currency is, however, also regulated by the foreign Exchange Management Act,

‘Actionable claims’, like debts, are things which a person cannot make use of, but which
can be claimed by him by means of a legal action. Actionable claims cannot be sold or
purchased like goods, they can only be assigned, as per the provisions of Transfer of
property Act.

Grass, growing crops, trees to be cut and their log wood to be delivered, malba of a
building to be demolished, etc. are goods. Similarly, things like goodwill, copyright, trade
mark, patents, water, gas electricity are all goods and may be the subject matter of a
contract of sale.

CLASSIFICATION OF GOODS

GOODS

1. Existing goods
a) Specific
b) Ascertained
c) Unascertained

2. Future goods
3. Contingent goods
1. Existing goods

Existing goods are the goods, which are owned and possessed by the seller at the time of
sale. Existing goods may be of three types;

(a) Specific Goods:

 The goods, which are identified and agreed upon by the parties at the time of
contract of sale.
 It should be noted that the goods must be both identified and agreed upon.

(b) Unascertained Goods:

 These are the goods, are not identified and agreed upon at the time of the
contract of sale.
 These goods are merely described by the parties at the time of contract of sale

(c) Ascertained Goods:

 There are the goods, which are identified after the formation of contract of sale.
When the un-ascertained goods are identified and agreed upon by the parties, the
goods are known as ascertained goods.

2. Future Goods
 Future goods are those goods, which do not exist at the time of the contract of
sale.
 These goods are to be manufactured or acquired by the seller after the making
of the contract of sale.
 Future goods cannot be sold, but there can only be an agreement to sell.
Example: A, a manufacturer agrees to sell 5 tables and 50 chairs to B at Rs.10,000.
B agrees to purchase it. However, tables and chairs are yet to manufactured by A.

3. Contingent goods
 It is a kind of future goods.
 It is goods, the acquisition of which is contingent upon the happening or
non –happening of an uncertain event.

Example: A agrees to sell the goods loaded on the ship “Titanic”, which is coming
from London to Bombay. The ship may or may not arrive. So, these goods will be
called as contingent goods.
 Points of Future Goods Contingent Goods
difference
s

1. Meaning Goods that are yet to be Goods, the acquisition of

manufactured produced or which by the Seller
acquired by the Seller after depends upon a
making contract of sale. contingency, which may or
may not happen.

2. Element of Acquisition of Future Goods does The procurement of

uncertainty not depend upon and uncertainty. Contingent Goods is
dependent upon an
uncertain event.

3. Scope Future Goods do not include They are wider in scope, it

contingent Goods because of the includes future Goods.
element of certainty.

4. Effect Where by a contract of Sale, the There may be a “Contract

of Seller purports to effect a present
Contract sale of future Goods, the contract
operates as an “agreement to
sell” the Goods[Sec.6(3)]
for Sale” of Goods, the
acquisition of which by the
Seller depends upon a
contingency which may or
may not happen [Sec.6 (2)]

5. B agrees to buy the entire crop of A agrees to sell to B a

Example wheat that would yield in S’s certain painting only if C,
farm, at the rate of Rs.1000 per its present owner, sells it
quintal. to him. The sale is
contingent upon the sale
by C.

ESSENTIAL ELEMENTS OF VALID CONTRACT OF SALES

The following are the essentials of valid contract of sale:

1. There must be two parties, one seller and other buyer.

Seller and buyer must be different.
Part owner can sell goods to another part owner.
Partners are not regarded as separate persons for the purpose of sale of the
partnership property. They are the joint owners of the goods and as such they cannot
 be both sellers and buyers [State of Gujarat v. Ramanlal S & W. (1965)]. But, a partner
may buy goods from the firm or sell goods to the firm.

2. There must be movable goods as subject matter of contract.

3. There must be a transfer of property in goods. It means general property. (i.e.

ownership)

4. There must be price involved. Price means money consideration for sale of goods.

 Exchange of goods for goods is barter.

 If Exchange is for partly goods and partly for money it is sale.

5. All essential elements of valid contract must be observed.

6. The contract of sale can be entered into, expressly or impliedly.

Difference between sale and agreement to sale

Definition of Sale

A sale is a type of contract in which the seller transfers the ownership of goods to the
buyer for money consideration. Here the relationship amidst the seller and buyer is of
creditor and debtor. It is the result of agreement to sell when the conditions are fulfilled
and the specified time is over. The following are the essential conditions regarding Sale:

 There must be at least two parties, one is buyer and other is the seller.
 The subject matter of the sale is the goods.
 Payment should be made in the country’s legal currency.
 The goods should pass from seller to buyer.
 All the necessary conditions of a valid contract should be present like free
consent, consideration, a lawful object, capacity of parties, etc.

If the goods are being sold and the property is transferred to the buyer, but the seller is
not paid. Then, the seller can go to the court and file a suit against the buyer for the
damages and the price too. On the other hand, if the goods are not delivered to the
buyer then he can also sue the seller for damages.

Definition of Agreement to Sell

An agreement to sell is also a contract of sale of goods, in which the seller agrees to
transfer goods to the buyer for a price at a later date or after the fulfillment of a
condition.
 When there is a willingness of the both the parties to constitute a sale i.e. the buyer
agrees to buy and the seller is ready to sale the goods for monetary value. In an
agreement to sell the performance of the contract is done at a future date, i.e. when the
time elapses or when the necessary conditions are satisfied. After the contract is
executed, it becomes a valid sale. All the necessary conditions required at the time of
sale, should exist in case of an agreement to sell too.

If the seller rescinds the contract, then the buyer can claim damages for the breach of
contract. On the other hand, the unpaid seller can also sue the buyer for damages.

BASIS FOR SALE AGREEMENT TO SELL

COMPARISON

Meaning When in a contract of sale, When in a contract of sale the

the exchange of goods for
money consideration takes
place immediately, it is known
as Sale.
parties to contract agree to
exchange the goods for a price
at a future specified date is
known as an Agreement to
Sell.

Nature Absolute Conditional

Type of Contract Executed Contract Executory Contract

Transfer of risk Yes No

Title In sale, the title of goods In an agreement to sell, the

transfers to the buyer with title of goods remains with the
the transfer of goods. seller as there is no transfer of
goods.

Right to sell Buyer Seller

Consequences of Responsibility of buyer Responsibility of seller

subsequent loss or
damage to the
goods

Tax VAT is charged at the time of No tax is levied.

sale.

Suit for breach of The buyer can claim damages Here the buyer has the right
contract by the from the seller and to claim damages only.
seller proprietary remedy from the
party to whom the goods are
sold.

Right of unpaid Right to sue for the price. Right to sue for damages.
seller

CONDITIONS AND WARRANTIES

Generally, at the time of sale, the seller makes some representation, statements of
stipulations for the praise of his goods. Some of representations are in nature of opinion
others are in nature of facts. Representation as to fact which becomes a part of contract
of sale is called as stipulation.

Stipulation may be condition or warranty depends upon its importance in relation to

contract.

 Stipulation which is essential to the main purpose of contract is known as condition.

Breach of condition gives the aggrieved party right to terminate the contract.
 Stipulation which is collateral to the main purpose of the contract is warranty.
Breach of warranty gives rise to the aggrieved party right to claim damages but
contract cannot be terminated.

The conditions and warranties may be express or implied.

Express conditions and warranties are those, which the parties agree expressly, i.e. orally
or in writing. Implied conditions are those, which are implied by the law in the absence of
any agreement to the contrary.

IMPLIED CONDITIONS

Conditions as to title – sec 14(a)

The following are the implied conditions which are contained in the Sales of Goods Act:

There is an implied condition on the part of the seller that

In the case of sale, the seller has a right to sell the goods, and

In the agreement to sell, the seller will have a right to sell the goods at the time of passing
of ownership in goods.
If the title of seller out to be defective, the buyer must return the goods to the true owner
and recover the price from the seller.

Conditions as to description – Sec 15

Where the goods are sold by description, there is an implied condition that the goods shall
correspond to the description.

Example; A machine was sold. The buyer has not been the machine, but the seller
described it as a new one. However, it was found to be a very old one. Held, the machine
was not according to the description.

Sale by sample – Sec 17

Where the goods are sold by sample, the following are implied conditions.

The bulk shall correspond to sample in quality.

The buyer shall be given a reasonable opportunity to compare the goods with the sample.

The goods shall be free from any defect, rendering them un – merchantable. It is to be
noted that this implied condition applies only in the case of latent defects, i.e. those
defects which cannot be discovered by ordinary inspection. In fact, such defects are
discovered when the goods are put to use or by examination in laboratories. The seller is
not liable for apparent or visible defects which can be discovered by examination

Sale by description as well as sample – Sec 15

If the sale is by sample as well as description, both conditions shall be satisfied. Goods
must correspond with sample as well as description.

Example: A agreed to sell to C some oil described as “Foreign refined oil” and warranted
only equal to sample. The goods supplied were equal to sample, but contained a mixture
to hemp oil. Held, C could reject the goods.

Conditions as to quality and fitness for buyer’s purpose –Sec 16

Where the buyer, expressly or impliedly, tells the seller the particular purpose for which
he needs the goods and relies on the skill or judgment of the seller, there is an implied
condition that the goods shall be reasonably fit for such purpose.

When the article can be used only for one particular purpose, the buyer need not inform
the seller the purpose for which the goods are required.
Example: A purchased a hot water bottle from a chemist. While the bottle was being used
by A’s wife, it burst and injured A’s wife. Held, the seller was liable for damages as the
bottle was not fit for the purpose for which it was meant – Priest vs Last.

Exceptions to the implied condition as to quality or fitness

The condition as to quality or fitness’ well not apply, if the buyer is suffering from an
abnormality, which renders the goods unsuitable for a particular purpose and the buyer
does not inform the seller about that abnormally.

Example A purchased a coat. He had abnormally sensitive skin, by wearing the coat, he
got skin complaint. Held, there was no breach of condition, as he had not disclosed the
abnormally of his skin.

Where the goods can be used for a number of purposes, the buyer should inform the
particular purpose for which such goods were required. If the does not disclose, there is
no such conditions of quality or fitness.

Conditions as to merchantability

Where goods are bought by description from a seller, who deals in goods of that
description, there is an implied conditions that the goods shall be of merchantable
quality.

‘Merchantability’ means that there is no defect in the goods, which renders them unfit
for sale. Thus, a watch that will not keep time and a pen that will not write cannot be
regarded as merchantable.

Example: A radio set was sold to a layman. The set was defective. It did not work in
spite of repairs, Held, the buyer could return the set and claim refund.

Condition as to wholesomeness

In the case of eatable and food – stuff, there is an implied condition that the goods shall
be wholesomeness, i.e., free from any defect which renders them unfit for human
consumption.

Example: A Purchased milk from B, a milk dealer. The milk contained typhoid germs. A’s
wife on taking the milk got infected and died. Held, A was entitled to get damages –
Frost vs Aylesbury Dairy Co. Ltd.

IMPLIED WARRANTIES
The following are the implied warranties which are contained in the Sales of Goods Act:

Warranty as to quiet possession – Sec 14

In the absence to any contract showing contrary intention, there is an implied warranty
that the buyer shall have and enjoy quiet possession of the goods. If the buyer is
disturbed in the enjoyment of the goods, he can claim damages from the seller.

Warranty against encumbrances – Sec 14

Unless the circumstances of the case are such as to show a contrary intension, there is
an implied warranty that the goods shall be free from any charge or encumbrance in
favour of any party not declared to the buyer before or at the time contract is made.
However, there will not be any such warranty if charge is declared to buyer at the time
of sale.

Warranty as to quality and fitness by usage of Trade – Sec 16

An implied warranty as to quality or fitness for a particular purpose may be annexed by

the usage of trade.

Warranty to disclose the dangerous nature of goods

In case of sale of dangerous goods, the seller is under an obligations to warn the buyer
about the probable danger. Failure to do so will make the seller liable to pay damages.

Example: A sold a tin of disinfectant to B, knowing that it was likely to be dangerous to

the tin, whereupon disinfectant powder went into her eyes, causing her injury. Held, A
was liable in damages to B, as he failed to warn B of the probable danger.

DOCTRINE OF CAVEAT EMPTOR

The doctrine of ‘Caveat Emptor’ means “let the buyer beware”. It means that the buyer
while purchasing goods must act with a “third eye and ear”, i.e.,
 He should be careful to see that the goods purchased will serve his purpose well.
 If the buyer is not careful and he finds later on that the goods do not serve his
purpose, he cannot hold the seller liable for it.

 The seller is under no obligation to tell the defects of his articles.

However, in the following exceptions Doctrine of caveat emptor is not applicable:

 Implied conditions as to quality or fitness. It means when buyer has specified his
purpose and relied on the skills of the seller.
 When goods are sold by description, it should be of merchantable quality.
  In case of edible items, implied condition of wholesomeness is applicable and
goods should are not fit for human consumption then buyer should not be held
liable.
 When the consent of buyer is obtained by fraud.
 Usage or custom trade.
PERFORMANCE OF A CONTACT OF SALE

Meaning Sec.2(2): Delivery means voluntary transfer of possession from one person to
another.

Duty of Seller Sec. 31: 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 care ontract of Sale.

Mode of delivery: Sec. 33: Delivery of Goods sold may be made by –

(a) Doing anything which the parties agree shall be treated as delivery; or

(b) 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

TYPES OF DELIVERY

 Actual Delivery
 It is a delivery where goods are handed over to the buyer or his authorized agent.
It means goods are physically put in possession of the buyer.
 Symbolic Delivery
 When goods are not physically delivered to the buyer but some symbol of the real
possession or control over goods is handed over to buyer.

Example - Delivery of key of the car.

 Constructive Delivery
 Where the third party who is in possession of goods, acknowledge to hold goods
on behalf of the buyer is known as construction delivery.
 Example: A sells 100 bags of cement lying in B’s godown. B agrees to hold the 100
bags of cement on behalf of A.

Rules relating to delivery

1. Mode of delivery
2. Payment and delivery are concurrent Sec 32.
General rule suggest that the delivery of goods and payment of price are concurrent
conditions. However, parties may provide otherwise.
3. Part Delivery Sec34.

A delivery of part of goods with an intention of giving the delivery of the whole amounts
to the delivery of the whole for the purpose of transfer of ownership of goods but a
delivery of part of goods with an intention of separating it from the whole lot does not
amount to the delivery of the whole of the goods

4. Buyer’s duty to Demand the Goods Sec. 35

It is seller’s duty to be ready and willing to deliver the goods to the buyer. But he is not
bound to deliver goods unless the buyer makes a demand for delivery of the goods.

If the buyer fails to demand the delivery of goods, the seller is not liable for breach;
Buyer must demand delivery within a reasonable time. However, contract may provide
otherwise.

5. Place of delivery:

Situation Place where goods are to be delivered

If contract specified the place of delivery At the place specified

Contract does not specify the place of At the place at which goods are at the time
delivery; of sale

In case of sale At the places at which goods are at the time

of agreement of sell.
In case of agreement of sell
At the place at which goods are manufacture,
(i) In respect of existing goods
produce or acquire
(ii) In respect of future goods

6. Time of Delivery

If the contract specified time of delivery, goods shall be delivered within such time.

If no time is specified in contract as to time of delivery of goods, it should be delivered

within reasonable time.

7. Delivery when the Goods in Possession of third party 36(3):

Unless and until such third person acknowledge to the buyer that the holds the goods on
his behalf

However this provision shall not affect the operation of the issue or transfer of any
documents of the title of the goods.
8. Time is tender of delivery

Demand or tender of delivery may be treat is reasonable unless made at reasonable

hour. That is reasonable hour is a question affects.

Expenses of delivery

 All expenses of making delivery of goods shall be paid by seller

 Buyer shall be the expense for receipt of goods, unless otherwise agreed.

9. Delivery of Wrong quantity Sec 37

If the seller has delivered excess quantity, the buyer has the following options:

To accept the whole of the goods delivered to him.

To reject the whole of the goods delivered of him.

To accept contracted quantity and reject the excess.

Seller has delivered short quantity, buyer has following options.

To accept the goods delivered to him.

To reject whole quantity delivered to him.

Right to reject the goods in excess of the contract does not apply where the variation is
negligible.

Further, the right to reject the goods is not similar to the right to cancel the contract. If
the buyer rejects the goods (either because they are less than or in excess of the
quantity contracted for), the seller has a right to tender again the contract quantity and
the buyer is bound to accept the same.

Delivery of Mixed Quality – Quantity

The seller is bound to deliver goods of exact quality – quantity otherwise buyer may:

Reject the whole.

Reject the goods not complying with quality or quantity and accept the rest.

[Contract is not repudiated] – means subsisting

UNPAID SELLER

Section 45

A seller of goods is deemed to be unpaid in the following cases:

 The price must be due but not paid. (When the whole of the price has not been
paid or tendered)
 A negotiable instrument, like cheque, bill of exchange etc., was received, but the
same has been dishonored.
 Seller who has obtained a decree for the price of the goods will also be an unpaid
seller, if the decree has not been satisfied.
 When the seller has been paid the large amount but small portion of payment
remains to be paid.
 Seller must have an immediate right of action for the price.

Right of an Unpaid Seller

Unpaid seller has the right against goods as well as against the buyer:

Rights of unpaid seller against the goods:

1. Where ownership is transferred

 Right of lien – Sec 47 – 49
 Right to stoppage in transit – Sec 50 – 52
 Right to resale of the goods
 Where ownership is not transferred to the buyer, seller has the right to
withhold delivery of goods.

2. Right of an unpaid seller against the goods Sec 46

The ownership has not been transferred.

Conditions Unpaid Seller + ownership not transferred.

Consequences lawfully refuse to deliver the goods to the buyer until he is paid the price.

Buyer cannot hold the seller liable for now delivery of goods.

Seller’s Lien Sec.47

Condition for exercising lien

Condition – Unpaid seller – actual possession

Buyer not paid the price of the good. The unpaid seller can exercise lien even through.

The property is goods has passed to the buyer

He is in the possession of the goods as an agent or bailee for the buyer.

Right of Lien

It means the right to retain the possession of goods until full price is received.

Seller can exercise his right of lien on the following two conditions:

 He must be in possession of the goods.

 He is the unpaid seller.

⇒ If buyer becomes insolvent, lien can be exercised by unpaid seller.

In the following circumstances, unpaid seller’s lien is lost: Sec 49

 When the seller waives his right of lien.

 When the buyer disposes off the goods by sale with consent of seller.
 When the goods are delivered off the buyer or his agent.
 When price is paid by the buyer.
 The right of lien cannot be exercised, where the right of lien has been expressly
excluded.
 By delivery of goods to carrier. Without reserving the right of disposal of goods,.
 By Estoppels i.e. where the seller so conducts himself that be leads third parties to
believe that the lien does not exist.

Right of Stoppage in Transit – Sec 50 to 52

Right of stoppage goods in transit Sec 50

 The right of stoppage in transit is an extension of the right of lien.

 The right of lien is a right to retain possession, whereas right of stoppage in transit
is a right to regain possession.
 The right of stoppages in transit can be exercised, if the goods are in transit, and
the buyer has become insolvent in the meantime.

Duration of transit – Sec 51

Carrier may hold the goods in three capacities:

 As Seller’s Agent: In this case, the seller has lien on the goods, so question of right
of stoppage in transit does not arise.
 As Buyer’s Agent: In this case, the seller cannot exercise the right of stoppage in
transit.
  In an Independent Capacity: In this case, sit from the time they are delivered to a
carrier for the purpose of transmission to the buyer, until the buyer or his agent
takes their delivery.
 Goods are deemed to be in course of transit from the time they are delivered to a
carrier for the purpose of transmission to the buyer, until the buyer or his agent takes
their delivery.

 The goods are in transit, even if the buyer asks the carrier to take them to some other
destination until they are delivered to the buyer at some other destination.

 If the goods are rejected by the buyer and the goods are in the possession of the
carrier, the transit is not at an end, even if the seller has refused to take them back.

How Stoppage in transit is effected Sec 52

Right of Stoppage of Goods in Transit can be exercised either:

 By taking actual possession of the goods, or
 By giving notice of his claim to the carrier, who holds the goods.

Right of Resale Sec 54

 In case of perishable goods, unpaid seller can resale the goods if following
conditions satisfied:
 Buyer fails to pay the price within reasonable time.
 Seller is not required to give notice of re – sale.

 In case of other goods (not perishable) unpaid, the sellers can resale goods if the
following conditions are satisfied:
 Seller has exercised his right of lien or stoppage of goods in transit.
 Seller has given notice to buyer to pay the price within reasonable time and buyer
fails to pay the price.

Right to Withhold Delivery of Goods

It means seller refuses to deliver goods to buyer.
The following conditions must be satisfied to exercise right to withhold delivery of
goods:
o Seller is unpaid seller
o Ownership of goods has not been passed.
Right of unpaid seller against buyer:

Suit for price [sec 55]

55 (1) – Property has passed to the buyer

- Buyer wrongfully neglector refuses to pay price of goods
55 (2) - property has not passed to the buyer
- Price is payable on a particular date irrespective of delivery.
- Buyer wrongfully neglects or refuses to pay price of goods
Suit for damages for non-acceptance (56)

When buyer wrongfully neglects or refuses to accept and pay for the goods, the seller
may sue him for damages for non-acceptance.

Suit for damages for Breach (60)

Repudiation of contract before due date: Where the contract is repudiated by the buyer
before the date of delivery the seller may treat the contract as rescind and sue for
damage for the breach.

Suit for interest [61(2) (d)]

Specific agreement between seller and buyer as to interest on price of goods from the
date on which payment becomes due the seller may recover the interest from the buyer.

This right is in addition to other remedies available to the seller.

Buyer’s remedies against the seller: (IMPORTANT)

1. Suit for damage for non – delivery Sec 57

Buyer is ready and willing the take delivery of goods but seller wrongfully neglects
or refuses delivery of goods, buyer may sue seller.
2. Suit for specific performance Sec 58
Where seller wrongfully refuses to deliver specific or ascertained goods, court may
direct specific performance order.
3. Suit for breach of warranty Sec 59
If there is breach of warranty, buyer may claim damages from the seller. Buyer
may deduct the amount of damage from price payable if price is not paid. Buyer
may recover the damages if price paid.
4. Right to repudiate the contract
 If the seller declares his intention of non – delivery of goods, buyer may repudiate
the contract and immediately sue for damages.
5. Suit for Interest
In the absence of any contract to the contrary no interest shall be payable by the
buyer on the delay payment. If, there is no such agreement, the seller may give
notice to the buyer of his intention to charge interest on delayed payment.

Sale by Description it is an implied condition

Where there is a contract of sale of goods by description. There is an implied condition

that the goods shall correspond with description. The main idea is that the goods
supplied must be as described by the seller, sale of goods by description includes many
situations as under:

(i) Where the buyer has never seen the goods and buys them only on the basis of
description given by the seller.

E.g. S bought a camera from K, who described it to be only 6 months old, but S found
that camera was extremely old, S was entitled to reject the camera because it did not
correspond with the description given by seller.

(ii) Where the buyer has seen the goods but he buys them only on the basis of
description given by the seller.

E.g. The buyer bought after seeing certain goods which were described by the seller as
dating back to seventeenth century but the buyer found them to be of 18 th century. The
buyer was entitled to reject the goods because the goods did not correspond with the
description given by the seller.

(iii) Where the method of packing has been described.

E.g. X purchased from Y 5000 tins of canned fruit to be packed in cases each containing
50 tins, but y supplied cases containing 25 tins. X was entitled to reject the goods
because the goods were not packed according to the description.

1. What is the purpose behind the enactment of Sale of Goods Act, 1930?
A. To define the laws relating to the sale of goods
B. To consolidate and amend the laws relating to the sale of goods
 C. To consolidate, amend and define the laws relating to the sale of goods
D. To define and amend the laws relating to the sale of goods
2. Section 2(1) of Sale of Goods Act defines ‘buyer’ as:
A. Person who buys goods and services
B. Person who agrees to buy goods
C. Person who buys or agrees to buy goods
D. Person who buys or agrees to buy goods and services
3. Before the enactment of Sale of Goods Act, the provisions regarding Sale of Goods
were contained in:
A. Indian Contract Act, 1872
B. Indian Registration Act, 1908
C. Transfer of Property Act, 1882
D. Indian Partnership Act, 1932
4. Which of the following cannot be said to be included in the term “goods” defined
under section 2(7) of the Sale of Goods Act, 1930:
A. Stock
B. Shares
C. Growing crops
D. Actionable claims
5. Which of the following most appropriately describes the term “sale” as per Sale of
Goods Act, 1930:
A. A contract whereby seller transfers the property in goods
B. A contract whereby seller transfers or agrees to transfer the property in
goods to the buyer for a price
C. A contract where transfer of the property in goods is to take place at a
future time
D. A contract where transfer of the property in goods is to take place subject
to some condition thereafter to be fulfilled
6. When does an agreement to sell become a sale as per the provisions of Sale Of
Goods Act, 1930:
A. When the seller transfers the property in goods
B. When the seller agrees to transfer the property in goods
 C. When the time elapses or the conditions subject to which the property in
the goods is to be transferred are fulfilled
D. Agreement to sell is deemed to be sale
7. What can be the subject matter of the contract of sale as per section 6 of Sale of
Goods Act:
A. Only existing goods owned or possessed by the owner
B. Only Future goods
C. Existing goods which are neither owned nor possessed by the owner
D. Existing goods, owned or possessed by the owner or future goods
8. Where in a contract of sale the seller purports to effect the present sale of the
future goods, the contract operates as: 
A. A Contract of sale
B. An agreement to sell the goods
C. A Contact of sale or agreement to sell
D. It is not a valid contract
9. In a contract for sale of specific goods, the goods, without the knowledge of seller
perished at the time when the contract was made, the contract is:
A. A voidable contract at the instance of seller
B. A voidable contract at the instance of buyer
C. A voidable contract subject to approval of the civil court
D. A void contract
10.Can the agreement be avoided when there is an agreement to sell specific goods
but subsequently the goods perish or become so damaged without any fault of
the seller or buyer:
A. It can be avoided by the parties
B. It can’t be avoided by the parties
C. It can be avoided only with the approval of Court
D. It can be avoided only if there is a contract in this regard between the
parties
11.A contract of sale may be made:
A. A in writing or by word of mouth
B. partly in writing of partly by word of mouth
 C. by the implied conduct of parties
D. All of the above
12.A is a stipulation essential to main purpose of the contract and the breach of
which gives rise to a right to treat the contract as repudiated:
A. Condition
B. Warranty
C. Disclaimer
D. Guarantee
13.A is a stipulation collateral to main purpose of the contract and the breach of
which gives rise to a right to claim for damages but not to a right to reject goods
and treat the contract as repudiated:
A. Condition
B. Warranty
C. Terms of contract
D. Disclaimer
14.When can a breach of condition be treated as a breach of warranty by the seller as
per the provisions of Sale of Goods Act, 1930:
A. When the buyer fulfils the condition stipulated to the contract of sale
B. When the contract of sale is severable and the buyer has accepted the
entire goods
C. When the contract of the sale is not severable and the buyer has accepted
the goods or part thereof, subject to an express or implied term in the
contract
D. When the contract of the sale is severable and the buyer has accepted the
entire goods or part thereof
15.In the Contract of Sale, there is an implied warranty that:
A. Seller has a right to sell the goods
B. The buyer has the right to have and enjoy the quiet possession of goods
only.
C. The goods shall be free from any charge or encumbrance
D. The buyer has the right to have and enjoy the quiet possession of goods
and that the goods shall be free from any charge or encumbrance
16.In a Contract for Sale of goods by sample and description, it is necessary that:
A. The bulk of goods shall correspond with the sample as well as description
B. The bulk of goods shall correspond with sample while it is not necessary
that the bulk of goods shall correspond with the description
C. The bulk of goods shall correspondent with the description and it is not
necessary that the bulk of goods correspond with the sample
D. Variation of the bulk of goods with the sample and description of goods is
only to be treated as a breach of warranty
17.In which of the following cases, there is an implied condition as to particular
quality or fitness of goods:
A. When buyer makes known to the seller the particular purpose for which
goods are required as to show that buyer relies on seller’s skill and
judgment and the goods are of description which it is in the ordinary
course of seller’s business to supply
B. When buyer makes known to the seller the particular purpose for which
goods are required as to show that buyer relies on seller’s skill and
judgment though the seller does not, in the ordinary course of its business,
supply such goods
C. When goods are bought by description from seller who deals in goods of
that description, whether as a manufacturer or otherwise and the buyer has
examined the goods and found defects in the same
D. When there is a contract for sale of a specified article under its patent or
other trade name
18.When does the property in the goods pass to the buyer in case of contract for the
sale of specific or ascertained goods:
A. When the contract for sale is made
B. When the parties to the contract intend it to be transferred
C. When the price is paid for the goods
D. When the delivery of goods has been made
19.When does the property in the goods pass to the buyer in case of an
unconditional contract for the sale of specific goods in a deliverable state:
 A. When the contract is made irrespective of whether the time of payment of
price or delivery of goods is postponed or not
B. When the party Intends to transfer
C. At the time of the payment of the price of goods
D. At the time of delivery of goods
20.When does the property in the goods pass to the buyer in case of a contract for
the sale of unascertained or future goods by description:
A. When the goods of that description and in a deliverable state are
unconditionally appropriated to the contract either by the seller or by the
buyer with the assent of each other
B. When the goods of that description and in a deliverable state are
conditionally appropriated to the contract either by the seller or by the
buyer with the assent of each other
C. When the goods of that description and in a non-deliverable state are
conditionally appropriated to the contract either by the seller or by the
buyer with the assent of each other
D. When the goods of that description and in a non-deliverable state are
unconditionally appropriated to the contract either by the seller or by the
buyer with the assent of each other
21.In which of the following cases property in the goods does not pass to the buyer
when the goods are delivered to the buyer on approval or “on sale or return” or
other similar terms:
A. When the buyer signifies his approval or acceptance to the seller as to
goods
B. When the buyer retains the goods without giving a notice of rejection and
upon expiry of reasonable time
C. When buyer gives a notice of rejection to the seller
D. When buyer does any other act adopting the transaction
22.Choose the most appropriate answer. Unless otherwise agreed, the goods remain
at seller’s risk until:
A. The goods have been delivered to the buyer
B. The goods have been utilised by the buyer
 C. The price to the goods has been received by seller
D. The property therein has been transferred to the buyer
23.When is the sale by mercantile agent who is in the possession of the goods or
documents of the title to the goods not valid:
A. When the mercantile agent acts in the ordinary course of business
B. When the buyer is acting in good faith and
C. When the buyer acts in good faith and has notice that the seller has no
authority to sell at the time of the contract of sale
D. When the owner has expressly authorised the act
24.When the seller has obtained possession of goods under a voidable contract, what
title does the buyer acquire when the goods are passed under the contract of sale:
A. Buyer acquires good title to the goods if he acts in good faith though he had
notice of seller’s defect of title
B. Buyer acquires good title to the goods if he had no notice of seller’s defect
of title though he did not act in good faith
C. Buyer does not acquire a good title to the goods even though he acts in
good faith and without notice of seller’s defect of title
D. Buyer acquires good title to the goods if he acts in good faith and without
notice of seller’s defect of title
25.Which of the following cannot be treated as ‘Delivery’ under the Sale of Goods
Act, 1930:
A. Doing anything which has the effect of putting goods in possession of legal
representatives of seller
B. Doing anything which has the effect of putting goods in possession of any
person authorised by the buyer
C. Doing anything which has the effect of putting goods in possession of the
buyer
D. Doing anything which the parties agree to be treated as delivery
26.What is the effect of part delivery of goods made in the progress of delivery of the
whole of the goods as per section 34 of the Sale of Goods Act, 1930:
A. Part delivery does not operate as a delivery of remainder.
B. Part delivery of the goods cannot be made under the Act.
 C. Part delivery has the same effect as the delivery of the whole only in case of
perishable goods.
D. Part delivery has the same effect as the delivery of the whole irrespective
of the type of goods unless part delivery is made with intention of
severing it from whole
27.Which of the following statement is correct with regard to delivery of goods by a
seller:
A. The seller is bound to deliver the goods under all circumstances
B. The seller is bound to deliver the goods when there is either an express
contract or when the buyer applies for delivery
C. The seller is bound to deliver the goods only when there is an express
contract to that effect
D. The seller is bound to deliver the goods only when the buyer applies for
delivery
28.Which of the following statements is incorrect in respect of Rules as to delivery:
A. Where the goods are in the possession of a third person, the goods are not
delivered to buyer unless such third person acknowledges to the buyer that
the goods are held by him on seller’s behalf
B. Where no time is fixed for sending the goods it should be delivered within a
reasonable time
C. The expenses of and incidental to putting the goods into a deliverable state
shall be borne by the buyer
D. Demand or tender of delivery may be treated as effectual only when made
at a reasonable hour
29.As per the provisions of Sale of Goods Act, 1930 which of the following is not a
consequence of delivery of wrong quantity of goods to the buyer:
A. Where the seller delivers less than the contracted quantity the buyer may
reject the same
B. Where the seller delivers more than the contracted quantity, the buyer
can only reject the goods not included in the contract
 C. Where the seller delivers the contracted goods mixed with the goods of a
different description, the buyer can reject the goods of different description
or may reject the whole of the goods.
D. Where the seller delivers more than the contracted quantity, the buyer may
accept the goods included in the contract and reject the rest, or he may
reject the whole. If the buyer accepts the whole of the goods so delivered,
he shall pay for them at the contract rate
30.Which of the following is true as regards delivery of goods in instalments as
provided under Sale of Goods Act:
A. The buyer is bound to accept the instalment deliveries only in case of
perishable goods
B. The buyer is bound to accept the instalment deliveries only in case of sale of
goods by description
C. The buyer is bound to accept the instalment deliveries only if agreed
between the parties
D. Delivery of goods can’t be made in instalments
31.Choose the most appropriate option out of the following in respect to return of
rejected goods by the buyer:
A. Buyer is not bound to return any type of rejected goods, having right to do
so, if he intimates to the seller that he refuses to accept the same
B. Buyer is bound to return all types of rejected goods
C. Buyer is bound to return only those rejected goods which are perishable
D. Buyer is bound to return only those rejected goods which are sold by
description.
32.Out of the following persons which of the following does not come under the
definition of the ‘’unpaid seller’’ as per Chapter V of Sale of Goods Act:
A. A seller to whom the whole of the price has not been paid or tendered
B. A seller to whom more than half of the price has been paid or tendered
C. A seller who has received a bill of exchange as conditional payment and
the condition on which it was received has not been fulfilled by reason of
the dishonour of the instrument or otherwise.
 D. A seller who has received a negotiable instrument as conditional payment
and the condition on which it was received has not been fulfilled by reason
of the dishonour of the instrument or otherwise
33.Which of the following is not the right of an unpaid seller under Sale of Goods Act,
1930:
A. Right of lien on goods for the price while the goods are in possession of
seller.
B. Right of stopping the goods in transit, in case of insolvency of buyer
C. Right of resale as limited by the Act
D. Right of withholding delivery where the property in the goods has passed
to the buyer
34.In which of the following cases the unpaid seller cannot exercise the right of lien
on goods in his possession:
A. Where goods have been sold without any stipulation regarding credit
B. Where the goods have been sold on credit but the term of the credit has
expired
C. Where the buyer becomes insolvent
D. Where the goods have been sold on credit but the term of credit has not
expired
35.In which of the following cases an unpaid seller does not lose his right of lien:
A. When seller delivers the goods to a carrier or other bailee for the purpose
of transmission to the buyer without reserving the right of disposal
B. When buyer or his agent lawfully obtains possession of the goods
C. When the unpaid seller has obtained the decree for the price of the goods
D. When the unpaid seller himself waives off his right of lien
36.In which of the following cases an unpaid seller who has parted with the
possession of the goods has the right of stopping such goods in transit:
A. When the buyer of goods has been declared as a person of unsound mind
B. When the buyer of goods has been has been sentenced to imprisonment
for a term of more than six months under any law
C. When the buyer of goods has been declared as an insolvent
 D. When the buyer of goods has been sentenced to imprisonment for a term
of more than two years under any law
37.In which of the following cases, transit of goods is not deemed to be at an end:
A. When the goods are rejected by the buyer and the carrier or bailee
continues in possession of goods
B. When the buyer or his agent in that behalf obtains delivery of goods before
their arrival at the appointed destination
C. When goods are in the possession of the carrier or bailee on buyer’s behalf
after their arrival at the appointed destination
D. When the carrier or other bailee wrongfully refuses to deliver the goods to
the buyer or his agent
38.Which of the following is incorrect with regard to the manner through which right
of stoppage in transit can be exercised by an unpaid seller:
A. An unpaid seller can exercise his right of stoppage in transit by taking actual
possession of the goods
B. An unpaid seller can exercise his right of stoppage in transit by giving notice
of his claim to the carrier who is in the possession of goods
C. An unpaid seller can exercise his right of stoppage in transit by giving notice
of his claim to the bailee who is in the possession of the goods
D. Unpaid seller can exercise the right of stoppage in transit by giving an
advertisement in leading newspaper of the place where the buyer
ordinarily carries on his business
39.Choose the most appropriate option in respect of a Sale which is not generally
rescinded by lien or stoppage in transit:
A. A contract of sale is rescinded by the exercise of an unpaid seller’s right of
lien or stoppage of lien
B. Where an unpaid seller who has exercised his right of lien or stoppage in
transit resells the goods, the buyer of such goods does not acquire a good
title thereto as against the original buyer.
C. Where the seller resells the goods in case of buyer’s default the original
contract of sale is not rescinded
 D. Where the unpaid seller who has exercised his right of lien or stoppage in
transit gives notice to buyer of his intention to resell, the unpaid seller
may resell the goods within a reasonable time and recover damages
incurred due to his breach of the contract from the original buyer
40.Which of the following does not fall in the category of “goods”:
A. Stock and shares
B. Money and actionable claims
C. Growing crops and grass
D. Things attached to or forming the part of land which are agreed to be
severed before sale or under contract of sale
41.Where there is a contract for the sale of specific or ascertained goods the
property in them is transferred to the buyer at the time when the:
A. Parties intend the property in goods to pass
B. Contract is entered into
C. Price is paid
D. Delivery of goods has been made
42.A contract of sale can be:
A. Absolute only
B. Conditional only
C. Absolute or conditional
D. Conditional only with the consent of the buyer
43.Where the transfer of the property in the goods is to take place at a future time or
subject to some condition, then such contract is called:
A. An agreement to sell
B. A contract to Sale
C. Future Contract
D. Conditional contract
44.What are the requisites of contract of sale:
A. An Offer and delivery of goods
B. An Offer to buy or sell goods, for a price and its acceptance
C. An Offer, delivery, possession and acceptance
D. An Offer, price, delivery and acceptance
45.According to Sale of Goods Act, 1930, ‘seller’ means a person:
A. who only agrees to sell the goods
B. who only sells the goods
C. who sells or agrees to sell
D. who transfers the possession of the goods to the other party
46.Where the goods are of perishable nature or where the unpaid seller exercises his
right of lien or right of stoppage of goods in transit and gives notice to buyer for
payment and buyer does not pay or tender within reasonable time, an unpaid
seller may:
A. Resell the goods and can recover the damages from the original buyer
B. Cannot resell the goods
C. Ask the buyer again to make payment
D. Take possession and mark the goods as bad
47._____________ is termed as consideration in a contract of sale:
A. Exchange money
B. Barter money
C. Price
D. Reward
48.When the buyer chooses to treat a breach of a condition as a breach of warranty,
then the buyer may:
A. Repudiate the contract
B. Reject the goods
C. Ask for indemnification
D. set up against the seller the breach of warranty in diminution or extinction
of the price or can sue the seller for damages
49.When the price is not determined in the contract or agreed between the parties,
the buyer shall pay the seller:
A. a fair price
B. a reasonable price
C. market price
D. average price
50.In case of breach of condition, the breach gives rise to:
 A. Claim for damages
B. Rejection of goods
C. A right to repudiate the contract
D. A right of indemnification
51.Which of the following is not an implied condition or warranty in a contract of
sale:
A. The seller may take back the possession of the goods at a future date
B. The seller has a right to sell the goods and that in the case of an agreement
to sell he will have a right to sell the goods at the time when the property is
to pass
C. The buyer shall have and enjoy quiet possession of the goods
D. The goods shall be free from any charge or encumbrance in favour of any
third party not declared or known to the buyer before or at the time when
the contract is made.
52.If the contract of sale is by sample as well as by description:
A. It is sufficient if the bulk of goods correspond to sample only
B. It is sufficient if the bulk of goods correspond to description only
C. It is not necessary to conform to the sample or description
D. It is not sufficient that the bulk of the goods correspond with the sample if
the goods do not correspond with the description
53.Where under a contract of sale, the property in the goods has passed to the buyer
and the buyer wrongfully neglects or refuses to pay for the goods, the seller may:
A. Ask for indemnification
B. Sue the buyer for damages of non-acceptance
C. Sue the buyer for compensation
D. Sue the buyer for the price of goods
54.The position of the finder of lost goods is that of:
A. Bailee
B. Bailor
C. Creditor
D. True owner
 55.X purchases a car from Y. After 6 months, Z, the true owner of the car, demanded
it from X. X had to return it to its true owner. X was entitled to recover the full
price even though several months have passed. This is an example of:
A. Condition as to description
B. Condition as to sample
C. Condition as to title
D. Condition as to fitness
56.A drug was sold by an auction and according to the usage of trade it was to
disclose in advance of any vast damage caused in the quality of the drug but such
disclosure was not made and the drug was found to be defective. This is an
example of:
A. Warranty as to undisturbed possession
B. Warranty as to quality or fitness by usage of trade
C. Warranty as to non-existence of encumbrances
D. Disclosure of dangerous nature of goods
57.Where the seller wrongfully neglects or refuses to deliver the goods to the buyer,
the buyer may sue for:
A. Damages for non-delivery
B. Damages for non-acceptance
C. Specific performance
D. Compensation


What does the RTI Act do?  
Under the RTI Act, 2005, Public Authorities are required to make disclosures on various aspects
of their structure and functioning.  This includes: (i) disclosure on their organisation, functions,
and structure, (ii) powers and duties of its officers and employees, and (iii) financial
information.  The intent of such suo moto disclosures is that the public should need minimum
recourse through the Act to obtain such information.  If such information is not made available,
citizens have the right to request for it from the Authorities.  This may include information in the
form of documents, files, or electronic records under the control of the Public Authority.  The
intent behind the enactment of the Act is to promote transparency and accountability in the
working of Public Authorities.  
Who is included in the ambit of ‘Public Authorities’?
‘Public Authorities’ include bodies of self-government established under the Constitution, or
under any law or government notification.  For instance, these include Ministries, public sector
undertakings, and regulators.  It also includes any entities owned, controlled or substantially
financed and non-government organizations substantially financed directly or indirectly by funds
provided by the government. 
How is the right to information enforced under the Act?
The Act has established a three tier structure for enforcing the right to information guaranteed
under the Act.
Public Authorities designate some of their officers as Public Information Officers.  The first
request for information goes to Central/State Assistant Public Information Officer and
Central/State Public Information Officer, designated by the Public Authorities. These Officers
are required to provide information to an RTI applicant within 30 days of the request.  Appeals
from their decisions go to an Appellate Authority.  Appeals against the order of the Appellate
Authority go to the State Information Commission or the Central Information Commission. 
These Information Commissions consists of a Chief Information Commissioner, and up to 10
Information Commissioners.  
What does the Right to Information (Amendment) Bill, 2019 propose?
The Bill changes the terms and conditions of service of the CIC and Information Commissioners
at the centre and in states.  Table 1 below compares the provisions of the Act and the Bill. 
Table 1:  Comparison of the provisions of the Right to Information Act, 2005 and the Right
to Information (Amendment) Bill, 2019
Provision RTI Act, 2005 RTI (Amendment) Bill, 2019
The Chief Information Commissioner (CIC) The Bill removes this provision and
and Information Commissioners (ICs) (at the states that the central government
Term
central and state level) will hold office for a will notify the term of office for the
term of five years. CIC and the ICs.
Quantum of The salary of the CIC and ICs (at the central  The Bill removes these provisions
Salary level) will be equivalent to the salary paid to and states that the salaries,
the Chief Election Commissioner and allowances, and other terms and
Election Commissioners, respectively. conditions of service of the central
and state CIC and ICs will be
Similarly, the salary of the CIC and ICs (at determined by the central
the state level) will be equivalent to the salary government.
paid to the Election Commissioners and the
 Chief Secretary to the state government,
respectively.
The Act states that at the time of the
appointment of the CIC and ICs (at the central
and state level), if they are receiving pension
or any other retirement benefits for previous
government service, their salaries will be
Deductions in reduced by an amount equal to the pension. The Bill removes these provisions.
Salary Previous government service includes service
under: (i) the central government, (ii) state
government, (iii) corporation established
under a central or state law, and (iv) company
owned or controlled by the central or state
government.