2/22/23, 11:49 AM CA Foundation: Business Laws :The Sale of Goods Act 1930

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Business Laws » The Sale of Goods Act 1930

The Sale of Goods Act 1930

It is an overview of the Sale of Goods Act 1930. It
discusses the Sale of Goods Act 1930 with examples,
sections, and particular definitions.

Table of Content
Essentials of a sale contract
Difference between sale and agreement to sale
Types of goods

The Indian Contract Act of 1872 governed

the sale and purchase of products until
1930. Sections 76 to 123 of the Indian
Contract Act were abolished in 1930, and
a new act named the Sale of Goods Act
1930 happened in their place. It went into
effect on July 1, 1930. Section 4 of the Sale
of Goods Act 1930 defines a contract of
sale as a contract in which the seller can
transfer or agrees to transfer the seller’s
goods to the party buying in exchange for
a fee. You can also try the Sale of Goods
Act 1930 mock tests to better understand
the subject and check your knowledge. 

Essentials of a sale contract

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2/22/23, 11:49 AM CA Foundation: Business Laws :The Sale of Goods Act 1930

There must be two parties present, the

buyer and the seller. 
There must be a transfer of goods or
property. 
There must be a price for the goods.
The contract should be a valid contract
according to the conditions.
Contract of sale includes both sale and
sell agreement. 

Difference between sale and

agreement to sale
In the case of a sale, the ownership is now
with the buyer, but it is with the seller in
the case of a sale agreement.
Sale-executed contract but sell
agreement- executory contract.
Sale-Risk of loss on buyer. Sell agreement-
Risk of loss on the seller. 
Sellers can’t resell the goods in case of
sale. However, in a sales agreement, the
seller can sell goods to a third party.
The sale happens for specific and existing
goods. Sell agreement happens for
unascertained or future goods. 
In the case of a sale, if there is a breach of
a contract, the seller has the right to sue
for the price of the goods, but there is no
such scope in the case of a sale
agreement. Therefore, he has the right to
sue for damages only.

Types of goods
Existing Goods: This refers to goods that
exist at the time of the contract of the
sale, i.e., goods that the seller owns or
already owns.
Specific or Ascertained Goods: These are
identified and agreed upon goods when

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2/22/23, 11:49 AM CA Foundation: Business Laws :The Sale of Goods Act 1930

making the contract of the sale.

Generic / Unidentified Goods: This refers
to goods that are not specified but
described.
Future Goods: This refers to goods the
seller will make, produce, or acquire after
signing the sale contract.
Contingent Goods: It signifies the goods
the purchases of which by the seller rely
upon a contingency that may or may not
arise.

The Fixing of the price

The essence of a sale contract is the price,
which is the monetary compensation for
the sale of commodities.

The seller decides the price of a good in

the below mentioned ways: 

By the parties themselves at the time of

contracting, or 
By a third party.
Maybe decided by the course of the
parties’ dealings, or
The contract can determine in some way,

CONDITIONS &
WARRANTIES under the
Sale of Goods Act, 1930
The Sale of Goods Act, 1930 important
questions include crucial concepts like
conditions and warranties. A stipulation is
a condition if it constitutes the basic
foundation of the contractor is essential
to the contract’s primary purpose. The
affected party has the right to treat the
contract as repudiated if the condition is
violated. If the vendor fails to meet a

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2/22/23, 11:49 AM CA Foundation: Business Laws :The Sale of Goods Act 1930

requirement, the buyer can treat the

contract as breached, refuse the products,
and collect the payment if they have
already paid for them. He can also sue for
damages due to the violation of the
contract.

Warranties: A warranty is a term that is

ancillary to the contract’s core purpose,
i.e., it is a secondary promise. A breach of
warranty has the consequence of
preventing the afflicted party from
repudiating the contract and allowing
them only to seek damages. As a result, if
a vendor fails to honour a guarantee, the
customer must accept the products and
file a claim for damages.

Conclusion
To gain a piece of in-depth knowledge,
the Sale of Goods Act 1930 mock tests are
beneficial for a student. There are some
tricky and overlapping areas of law in the
contract, property laws, and this act. So, it
is crucial to understand the rule of law
under the Sale of Goods Act 1930 with
examples. The article has discussed the
fixing of price and the essentials of sale
deed, caveat emptor doctrine, auction of
sale, etc. The Sale of Goods Act 1930
important questions can also include
areas like transfer of ownership, transfer
of title, and delivery has a further scope of
the study.

Crack CA
Foundation

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