Sale of Goods

Act Team Members

G Sudhir Kumar
G S Kalpana
Hari Priya
Ram Kishan
Poulomi Roy Bera
Sanjusha G
Sovan Nanda
Sapna Yadav
The Sale of Goods Act, 1930
 15th March 1930.

 The act came into force on 1st July 1930

 Definition, Section 4.

 The act extends to whole India except ( J& K).

 Bilateral Contract
 Contract of Sale according to Potheir.
 State Of Gujarat vs Ramanlal sons and co.
 Graff vs Evans.
 Money Consideration
 Consideration for sale of goods must be money.

 Aldridge vs Johnson

 Esso Petroleum co Ltd Vs CCE, [1976]

 Sale and Contract of Work and
Material
 Clay Vs Yates

 Lee Vs Griffin

 Robinson Vs Graves
 Sale and Contract of Work and
Material Contd..
 State of Rajasthan Vs man Industrial Corp. Ltd.
 Union Of India Vs Central India Machinery Mfg co.
 State of Punjab Vs Associated Hotels of India Ltd.
 Sale and Agreement to Sale

 Sale : Section 4 of the Sale of Goods Act defines “sale”

as : A contract of sale of goods is a contract whereby
the seller transfers or agrees to transfer the property in
goods to the buyer for a price.
 Agreement to Sale : Transfer of property in the goods
is to take place at a future date or after fulfillment of
certain condition.
 Contd..
Sale Agreement to Sale

Ownership is with the buyer. Ownership is with the seller

Existing and specific goods Is for future and contingent

goods
Sue for price in case of breach Sue for damages only ,in case of
breach

Goods lost by accident, then the Goods lost on accident, then

loss falls on the buyer loss falls on seller

Cannot re-sell The original buyer can only sue

the seller for damages
Effect of Destruction of Goods
Goods perishing before making of contract [Sec-7]
Conditions
contract must be for the sale of specific goods.
 they must have perished before the contract was made
and without the knowledge of seller.
Goods perishing after agreement to SELL [Sec -8]
Effect of Destruction of Goods
The price [Sec-9]
The price in a contract of sale may be fixed by the contract
or may be left to be fixed in manner thereby agreed or may
be determined by course of dealing between the parties.
Where the price is not determined with the foregoing
provisions the buyer shall pay the seller a reasonable price.
Fixing of price
Agreement to sell at valuation [Sec – 10]
 Conditions & Warranties
Condition – A stipulation essential to the main purpose of
the contract, the breach of which gives rise to a right to
treat the contract as repudiated. [Section 12(1)]
Baldry v Marshall

Warranty – A stipulation collateral to the main purpose

of the contract, the breach of which gives rise to a claim
for damages but not to a right to reject the goods and
treat the contract as repudiated. [Section 12(1)]
T. & J. Harrison v Knowles and Foster
 Condition vs. Warranty
Condition
 A condition is a stipulation (in a
contract), which is essential to the
main purpose of the contract.
 A breach of condition gives the
aggrieved party a right to sue for
damages as well as the right to
repudiate the contract.
 A breach of condition may be
treated as a breach of warranty in
certain circumstances.
Warranty
 A warranty is a stipulation, which
is only collateral or subsidiary to
the main purpose of the contract.
 A breach of warranty gives only
the right to sue for damages. The
contract cannot be repudiated.
 A breach of warranty cannot be
treated as a breach of condition.
 Express & Implied
 Conditions and Warranties may be either express or
implied.
 “Express” when the terms of the contract expressly
provide for them.

 “Implied” when the law deems their existence in the

contract even without their actually having been put
in the contract.
 Implied Conditions
 Condition as to Title [Section 14]
 Sale by Description [Section 15]
 Purchase on basis of description
 Packing as Description
 Meaning of correspondence with description
 Sale by Description as well as by Sample [Section 15]
 Exceptions to Principle of Caveat Emptor [Section 16]
 Implied Warranties

Section 14(6)

Cases:
•Rowland vs Divall
•Niblett vs Confectioner’s
Materials Co.
•Mason vs Burningham
Condition Reduced to Warranty only for Remedial Purposes:
House of Lords in Wallis, Son & Wells Vs Pratt : Common English Sanfion to Giant Sanfion

-A condition is always a condition whether the remedies remain the same or not.

In these kind of cases, the buyers have 2 kinds of remedies:

1)Reject goods- Refund of price paid-Sue for damages of non-delivery

GOODS

2) Waive condition- Accept goods- Sue for Damages.

GOODS
 Implied Warranties
Free from Encumbrances Condition Reduced to Warranty (CRW)
Section. 14(C) Section. 13

Waiver by Buyer Acceptance of Goods by Buyer

Cases Under CRW-Acceptance of Goods by Buyer:

•Hardy & Co. (London) Ltd. Vs Hillerns & Fowler
•Bombay High Court Appeal
 Exclusion of Implied Terms
•By Express Contract

Case: Andrew Bros ( Bournemouth) Ltd. Vs Singer & Co. LTd- Express one.
- excluding liability for “ all conditions, warranties and liabilities,
implied by statute, Common law or otherwise.

Fundamental Breach-Performance of Contract: Karsales (Harrow) Ltd. Vs

Wallis

Case: Ernest Beck & Co Vs K. Syzman Owski & Co. :

2000 gross “200 yards reel”

•Course Dealing

•Trade Usage
 Stipulation of Time
(1) A stipulation in a contract of sale with reference to goods which are
the subject thereof may be a condition or a warranty.
(2) A condition is a stipulation essential to the main purpose of the
contract, the breach of which gives rise to right to treat the contract as
repudiated.
(3) A warranty is a stipulation collateral to the main purpose of the
contract, the breach of which gives rise to a claim for damages but not to
a right to reject the goods and treat the contract as repudiated.
(4) Whether a stipulation in a contract of sale is condition or a warranty
depends in each case on the construction of the contract.

Stipulations as to time.- Unless a different intention appears from the

terms of the contract,
stipulations as to time of payment are not deemed to be of the essence
of a contract of sale.
Whether any other stipulations as to time is of the essence of the
contract or not depends on the
terms of the contract.
 PASSING OF PROPERTY

• Significance of passing property

• Property passes when intended to pass
• Specific goods in a delivery state
1.Specific goods
2.Deliverable state
3.Unconditional contract
Tarling v Baxter
• Property passes at the time of contract
 Cont………..
• Goods to be put in deliverable state
• Goods to be weighed or measured
• Sales on approval
1.By acceptance
2.By failure to return
 Transfer of Title by Non Owners
 Protection of Property(Nemo Dat Quod Non Habet) :

According to section 27
“No one can give a better title than he himself possesses.”

 “When the goods are sold by a person who is not the owner
thereof and who does not sell them under the consent of the
owner, the buyer acquires no better title to the goods than the
seller had.”
eg: leo vs Bays ---- Horse auction
Farquharson & Bros vs king & Co ---- Timber sale

Exception: finder of lost goods may sell them if

 The owner can not , with reasonable diligence ,be found or
 If found he refuses to pay lawful charges of the founder
 The goods are of perishable nature
 Exceptions to General Rule
Protection of Commercial Transactions :

In case of commercial transactions, there are lots of exceptions, as follows

Exceptions :
 Sale by a mercantile agent
eg : Lowther vs Harris
 Sale by a joint Owner
 Sale by a person in possession under a voidable contract
eg : Phillips vs brooks
 Sale by a seller in possession of goods after sale
 Sale by a buyer in possession of goods
 Estoppel
eg : Mother and son
 Performance of contract
Section 31, Sale of Goods Act 1930 provides
that it is the duty of the seller to deliver the
goods to the buyer, who in turn will have to
accept the goods and make the payment.

Delivery Of Goods
 Actual delivery
 Symbolic delivery
 Constructive delivery/ delivery by attornment
Rules as to delivery of goods

 Mode of delivery
 Delivery and payment
 Effect of part delivery
 Place of delivery
 Time of delivery
 Delivery by attornment
 Time for tender of delivery
 Expenses of delivery
Delivery of wrong quantity
Short delivery
Excess delivery
Delivery of mixed goods
Installment of deliveries
Delivery to carrier or wharfing

Acceptance of Delivery ( Sec. 42)

1.Intimates to the seller
2.Inconsistent with the ownership of the
seller.
3.After the lapse of the reasonable time, he
retains the goods.