THE SALE OF

GOOD ACT,1930
INTRODUCTION
 The Sale of Goods Act,1930 came into existence
repealing Ss. 76-123 of the Indian Contract act, 1872,
and is still a branch of the Contract act.

 “A contract of sale of goods is a contract whereby the

seller transfers or agrees to transfer the property or goods
to the buyer for a price.”

 For The transaction under this Act, the general principal

of contract act apply and other special features that shall
be discussed later in detail.
SOME IMPORTANT LEGAL TERMS

 Seller: person who sells or agrees to sell.

 Delivery: voluntary transfer of possession from one

person to another.

 Documents of title to goods:-

1)Bill of lading: it is a receipt given by ship owner

acknowledging the receipt of goods for carriage.
2) Dock Warrant: it is a document issued by a dock owner
or wharf owner containing the details of goods and also
containing a declaration or certificate by such an owner
that the goods are held on behalf of the person whose
name appears in it or his assignee by endorsement.

3)Ware housekeeper's certificate: a document issued by the

owner of a warehouse, certifying that the goods
specified in the document are in the warehouse.

4)Delivery order: It is also known as a warrant or an order

of delivery of goods.
GOODS
 Every kind of movable property other than actionable
claims and money.
 Put a table classifying goods.
ESSENTIALS OF CONTRACT OF SALE
 Number of parties

 Goods

 Transfer of property

 Price

 Absolute or conditional

 Form

 Essentials of a contract
DISTINCTION

Sale Agreement of Sale

 It is a contract whereby  The property in the goods

the seller transfers or is to take place at a future
agrees to transfer the time or subject to some
property of goods to the conditions thereafter to be
buyer for a price. fulfilled the contract.
 Transfer of ownership of  Transfer of ownership of
goods takes place goods is to take place at a
immediately. future time.
 Buyer gets the right to  Buyer doesnot gets such
enjoy the goods against right.
the whole world
including the seller.
 Transfer of risk of loss
 Transfer of risk of loss
shall be borne by buyer
shall be borne by seller
even though the goods
even though the goods
are in possession of seller.
are in possession of
buyer.
EFFECT OF DESTRUCTION OF GOODS.
 Goods perishing before making the contract.
1)It must be a contract for sale of specific goods.

2)The goods must have perished before making the

contract.

3)The seller must not be aware of perishing or damaging.

 Goods perishing before sale but after agreement to sale.

1)The contract of sale must be an ‘agreement to sale’&
not an actual ‘sell’.

.
2)The agreement to sell must be for some speific goods

3)The goods must perish or become damaged before the

‘agreement to sale’ becomes ‘sale’.

4)The goods get perished or damaged,without any

wrongful Act or default on the part of the seller or
buyer.
MODES OF ASCERTAINMENT OF PRICE.
 By the terms of the contract.

 May be fixed in a manner agreed.

 May be determined in course of dealing between parties.

 May be reasonable price.

 By the valuation of third party.

CONDITIONS

“A stipulation essential to the main purpose of the contract,

the breach of which give rise to a right to treat the
contract as repudiated.”

TYPES OF CONDITIONS:
 Express conditions.

 Implied conditions.
 Express conditions: they are those stipulations
specifically spelt out by the contracting party.

 Implied contract: they are conditions,which are

presumed to be incorporated in every contract of sale,
unless specifically excluded.
They are of 8 types-
1)Condition as to title.
2)Condition as to description.
3)Condition as to sample.
4)Condition as to sample & description.
5)Condition as to quality or fitness for buyer’s purpose.
6)Condition as to merchantable property.
7)Condition as to wholesomeness.
8)Condition as to trade usage.
WARRANTIES
“A stipulation collateral to the main purpose of the
contract, the breach of which give rise to a claim foe
damages but not to a right to reject the goods and treat
the contract as repudiated.”

Example:-A while selling his car to B, stated the car gives

a mileage of 12 kms per litre of petrol. The car gives
only 10 kms per litre. B cannot reject the car. It is breach
of warranty.
TYPES OF WARRANTY:-
 Express Warranty.

 Implied Warranty.

1)Express warranty:-They are stipulations, which are

specifically laid down by contracting party.

2)Implied warranty:-They are stipulations which the law

implies in a contract of sale.
There are 4 implied warranties :-
1)As to quiet possession.
2)As to freedom from encumbrance.
3)To disclose dangerous nature of goods.
4)Warranty annexed by usage of trade.
QUESTION
How to determine whether a stipulation is a condition or
warranty?

Answer:
“A stipulation in a contract of sale is condition or warranty
depends on the construction of contract. A stipulation
may be a condition though called a warranty in
contract.”
It is intention rather than the terminology used that will
decide whether the stipulation is a condition or warranty.
Example:-
‘A’ wants to buy a washing machine ,whose body is of
green color so as to match with bathroom tiles and
fittings. Here the green color that is generally
secondary(warranty) has become primary(condition)
from the intention of the parties.
DISTINCTION
CONDITION WARRANTY

 A stipulation essential to  A stipulation collateral to

the main purpose of the
contract, the breach of
which give rise to treat
the contract as
repudiated.
the main purpose of the
contract ,the breach of
which give rise to claim
for damages and not to a
right to reject the goods
and treat the contract as
repudiated.
 The stipulation is
essential.
 The aggrieved party can
terminate the contract, can
claim for damages or treat
it as breach of warranty
 A breach of condition
may be treated as breach
of warranty.
 The stipulation is
collateral.
 The aggrieved party
cannot terminate the
contract but can only
claim damages.
 A breach of warranty
cannot be treated as
breach of condition.
 Circumstances where a condition may be treated as
warranty.
 diagram
CAVEAT EMPTOR
Caveat emptor or buying behaviour implies that “the
person who buys the goods, must keep his eyes open, his
mind active and conscious while buying the goods.”
This doctrine put entire responsibility on buyer.

Section 16 of the Sales Act states-

“Subject to the provisions of this Act and of any other
law for the time being in force, there is no implied
warranty or condition as to the quality or fitness for any
particular purpose of goods supplied under a contract of
sale.”
 Example:-
 Hens were sold in an auction subject to all faults. the
seller knew that hens were suffering from bird flu, which
he did not inform the buyer while buying. All hens
except one died. They also infected buyer’s own hens.
Held, the seller is not liable on the basis of ‘caveat
emptor.’