Module 3

• Sale of Goods Act (1930 ) A

• Conditions and warranties
• Rights of an unpaid seller
• Title to goods
• Rights and duties of buyer and seller
 Sale of Goods Act 1930
• It was originally contained in chapter VII of
Indian Contract Act.

• It was repealed by separate enactment on 1st

July 1930.

• It mainly follows the principles of English Sale

of Goods act 1893.
 Goods Sec 2 (7)
• The ‘goods” include every kind of movable
property other than actionable claim or money.

• Goods include stocks, shares, growing crops and

grass

• Actionable claim- which can be enforced only by

taking action in a court of law.
 Contract of Sale
• Sec 4 of the Sale of Goods Act defines a contract
of sale as

• “A contract of sale of goods is a contract

whereby the seller the property or agrees to
transfer the property in goods to the buyer for a
price’.
• Absolute sale – Sale over counter
• Conditional sale – if transfer is made on
certain conditions to be fulfilled
• Agreement to sale- when sale take place in a
future date ,there will be an agreement
 Essential elements of Sale
1. Contract
2. Two parties
3. Transfer or agreement to transfer
4. Subject matter of sale
5. price
 Distinction between Sale and agreement to sale
Points of difference Sale Agreement to sale

Transfer of property immediate effect Future effect

Risk Risk passes to buyer Seller remains the

owner and hence
runs all the risks
Breach by the buyer Seller may sue him Seller can sue for
for price damages and not
price
Nature of the Executed Executory
contract
Breach by the seller Buyer may sue for Buyer can only sue
delivery of goods for damages
 Points of difference Sale Agreement to sale

When goods are Buyer has to bear the Seller has to bear
destroyed losses
Insolvency of the Seller should deliver Seller can refuse to
buyer the goods to official deliver the goods
reciever;
Ex:Investment in
shares

General and particular Right in rem Right in personam

property
Insolvency of the Buyer can recover Buyer can claim
seller goods from official rateable dividend, if he
receiver has made the payment

Right of resale Ownership is with the Ownership remains

buyer with the seller
 Difference between
Points of difference
Sale Sale and Bailment
Bailment
Transfer of ownership There is transfer No transfer of
ownership
Delivery of goods Immediate or immediate
postponed
Return of goods No return of goods Must redeliver
sold
On default Unpaid seller can sell No right to sell
the goods to another
customer
Dealing of goods Buyers option Bailors instructions
Consideration Price An undertaking where
he has to return the
goods after the
purpose is
accomplished
 Subject matter of contract
• Sec 6 provides that “Goods” form the subject
matter of contract of sale
1. Existing goods
1. Specific goods –at the time of sale - car
2. Ascertained goods –as per agreement- chair
3. Unascertained goods – not definite or specific

2. Future goods – contract to sell oil

3. Contingent goods- future crops
 Price
• Price is defined as “the money consideration
for the sale of goods”
1. Fixation of price
2. Mode of payment of price
3. Agreement to sell at valuation of third parties