INTRODUCTION TO BUSINESS LAW

COURSE CODE: BUS 360

SECTION: 01

LECTURE 6: THE LAW RELATING TO SALE OF

MOVABLE GOODS - DEFINITIONS
SOURCE: BOOK II: CHAPTER 1, COMMERCIAL LAW AND INDUSTRIAL LAW, 27 TH EDITION BY
ARUN KUMAR SEN AND JITENDRA KUMAR MITRA

Course Instructor: Seeratus Sabah

 Buyer Seller and Goods
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Buyer: Buyer means a person who buys or agrees to buy

goods.
Seller: Seller means a person who sells or agrees to sell goods.
Goods: The term “Goods” includes every kind of movable
property except (i) actionable claims and (ii) money.
An actionable claim means a debt or a claim for money which
a person may have against another and which he may
recover by suit. Money means legal tender money.
Examples: Furniture, clothing, share, debentures, crops, fruits
etc.
 Types of Goods
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Existing Goods: Existing goods are goods which are

already in existence and which are physically present
in some person's possession and ownership.
Future Goods: Future Goods are goods which will be
manufactured or produced or acquired by the seller
after the making of the contract of sale.
Example: Shibly agrees to sell to Shahin all the mango
which will be produced in his garden next year. This
is an agreement for the sale of future goods.
 Types of Goods
4

Contingent Goods: There may be a contract for the sale

of goods the acquisition of which by the seller
depends upon a contingency which may or may not
happen. In such cases the goods sold are called
Contingent Goods. Contingent goods come within
the class of future goods.
 Example : Anika agrees to sell to Rokiya a certain
painting provided she is able to purchase it from its
present owner Zulfiker. This is an agreement for the
sale of contingent goods.
 Contract of Sale (Characteristics)
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1. A contract of sale of goods is a contract by which the seller

transfers or agrees to transfer the good to the buyer for a money
consideration, called the price.
2. There may be a contract of sale between one part owner (to be an

owner of something along with one or more people ) and another.

3. Where under a contract of sale the good is transferred from the

seller to the buyer the contract is called a sale.

4. Where under a contract of sale the transfer of the good is to take

place at a future time or subject to some condition later to be

fulfilled the contract is called an agreement to sell.
5. A contract of sale may be absolute or conditional.
 The essential elements of a contract for the sale of
goods
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I. Movable Goods: not land or buildings

II. Moveable Goods for Money
III. Two Parties: Change of ownership, bilateral, buyer and seller,
one part owner sells to another part owner of a firm -partners
IV. Formation of the contract of sale: offer and acceptance
V. Methods of forming the contract: writing, verbal, implied
VI. The terms of contract: time, place, mode of delivery,
conditions, warranties
VII. Other essential elements: free consent, lawful, competency,
consideration etc.
 Destruction of Goods
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Goods perishing before making a contract :

Example: There was a sale of cargo of corn. Without the
knowledge of the seller, the cargo had before the sale
become heated and was therefore landed at another port and
sold. The sale is void.
Goods perishing before sale but, after agreement to sell:
There was a contract of the sale of a horse. The buyer
would use it for eight days for trial and if it was not suitable
it would be returned, Three days before the delivery of the
horse, it died, without a fault on the either party. The
contract was avoided.
 Hire - Purchase Agreement
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 A hire-purchase agreement is one under which a

person takes delivery of goods promising to pay the
price by a certain number of installments and, until
full payment is made, to pay hire charges for using
the goods. 
 In a hire-purchase agreement, the purchaser does
not become owner till the full price is paid.
 Bailment
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 Bailment describes a legal relationship in common law

where physical possession of personal property, is
transferred from one person to another person who
subsequently has possession of the property.
 It arises when a person gives property to someone else for
safekeeping.
 Bailment is distinguished from a contract of sale or a gift of
property, as it only involves the transfer of possession and
not its ownership.
 the bailee is generally not entitled to the use of the
property while it is in his possession.