THE SALE OF

GOODS ACT, 1930

 Introduction
In India, the contracts of sale of goods are
regulated by the sale of goods Act, 1930. the act
came into force on 1st day of July,1930. prior to
passing of this Act, the law relating to contracts of
sale of goods was embodied in sections 76 to 123
of the Indian contract act, 1872.

The said provisions have since been repealed by

the Sale of Goods Act, 1930 in view of the needs
of the development of trade and commerce in our
country.
 Extent and Scope of the Act

The sale of goods Act, 1930 extends to the whole

of India except the State of Jammu and Kashmir. It
deals with all the contracts of sale of goods but
does not deal with contract of sale of services or
pledge of goods, mortgage of property or barter of
goods.
 Definition of Contract of sale
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. [sec. 4(1)]

In other words, contract of sale of goods is the

contract whereby one party (called the seller) (1.)
transfers or (2.) agrees to transfer the property in
the goods to another party (called the buyer) for a
price i.e. consideration. It should be noted that the
term contract of sale includes both (1.) sale and
(2.) agreement to sell.
 Goods
According to Section 2(7) of this act ,’goods’
means every kind of movable property other than
actionable claims and money; and includes stock
and shares, growing crops, grass and things
attached to or forming part of the land which are
agreed to be severed before sale or under the
contract of sale.
 Classification of Goods
Goods forming the subject matter of contract of
sale may be classified into the following classes:-
1.Existing goods
2.Future goods
3.Contingent goods
Existing goods:- goods owned or possessed by
the seller at time of contract of sale are known as
existing goods. E.g.. A has four cars in his
showroom for sale. The cars are existing goods
owned and possessed by him.
 Classification of Goods
The existing goods may be further classified in to
three types:
1. Specific goods:- specific goods means the goods
identified and agreed upon at the time a contract of
sale is made. It is the exact identified existing
goods which becomes the subject matter of
contract of sale.

2. Ascertained goods:- generally the term specific

goods and ascertained goods are used for the same
kind of goods. But more specifically the term
Classification of Goods

3. Unascertained or generic goods:-

The goods which are not identified and agreed
upon at the time of making of contract of sale
are known as unascertained goods. Such goods
are indicated or defined by description at the
time of contract of sale.
 Classification of Goods
• Future goods:- Future goods means the goods to be
manufactured or produced or acquired by the seller after
making of the contract of sale. [sec. 2(6)]

Where a contract of sale of future goods is made, it is an

agreement to sell not a sale. It is because the property in
the goods can be transferred only at a future date when the
goods shall be manufactured or acquired.

Illustration: Anta agrees with banta to sell the entire wheat to

be produced in his all the farms during a particular seasons
Rs. 10,000 per ton. This is an agreement to sell the future
goods. It will become sale when wheat are delivered.
Classification of Goods
• Contingent Goods:- contingent goods are the
goods, the acquisition of which depends upon
the happening or non-happening of a
contingency i.e. contingent event. [sec.6(2)]

Illustration: Anta agrees to sell 100 units of

specific goods in particular ship to Banta
provided the ship arrives safely. This is an
agreement to sell the contingent goods because
the acquisition of goods depends upon the
contingency of arrival of the ship.
 Price of the Goods
Price means the money consideration for a sale of
goods. [Sec 9(10)]. Modes of determination of
Price are as follows:-
1. By the contract of sale- the price in a contract of
sale may be fixed by contract itself.
2. By the manner agreed between the parties:- the
price in the contract of sale may be left to be fixed
in the manner agreed between the parties.
3. By the course of dealings between the parties:- the
previous dealings or usage of trade may be the
basis of determination of price.
Price of the Goods
4. Reasonable Price:- when the price is not
determined in accordance with the foregoing
provisions, the buyer shall pay the seller a
reasonable price.

5. By the Government:- price may also be fixed by

the control order of the Govt.

6. By third party:- sometimes an agreement to sell

is made on the terms that the price is to be fixed
by the valuation of a third party.