Sale of Goods Act 1930

Is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer or a price Sec. 4(1)
A

contract or sale may be absolute or conditional Sec. 4(2)

Sale is generic term and includes both a sale and an agreement to sell

 Essentials
Goods Price

of a contract of sale

Two parties

Transfer of general property Essential elements of a valid contract

Sale and agreement to sell- Distinction

Sale
Transfer of property Type of goods Risk of loss Consequence of breach Right to resell Immediate

Agreement to sell
To take place in future

Only for existing & Future & contingent goods specific goods Loss falls on buyer Loss falls on seller Seller can sue for price Seller can sue only for damages not for price

Seller can not resell The buyer gets a good title. except in certain Original buyer can sue for cases damages Jus in rem Seller can claim rateable dividend for the price Jus in personam Seller is not bound to part with the goods

General & particular property Insolvency of buyer

Insolvency of seller

Entitled to recover Can claim rateable dividend the goods from the not the goods official receiver

Hire- purchase agreement

Is a contract whereby the owner of the goods lets them on hire to another person called hirer or hire purchaser on payment of rent to be paid in instalments and upon agreement that when a certain number of such instalments is paid the property in the goods will pass to the hirer.

Sale Hire purchase agreement Ownership is transferred Only when agreed number of from the seller to the buyer as instalments is paid soon as the contract is entered The position of buyer is that Hire purchaser is of bailee of owner Buyer cannot terminate and Has an option to terminate as such is bound to pay the the contract at any stage price of the goods In the case of instalments, the amount paid by the buyer is reduced towards the price of the goods Payments are regarded as hire charges and not as payments towards the price of the goods.

Sale and hire purchase agreement

Subject matter of contract of sale Goods: Every kind of movable property other than actionable claims and money and includes stocks, shares, growing crops, grass, trade marks, copy rights, patent rights, goodwill electricity, water, gas etc. [Sec 2((7)] Price: The money consideration for a sale of goods

Classification of goods:
Existing goods:- Specific unascertained goods. Future goods: Contingent goods: goods, Ascertained goods,

Effects of destruction of goods

Goods perishing before making of contract [Sec. 7] Goods perishing after the agreement to sell but before

the sale is effected [Sec. 8]

(Secs. 7&8 apply to specific goods not to un ascertained goods)

Conditions and Warranties A stipulation in a contract of sale with reference to goods which are subject to thereof may be condition or warranties Condition: Is a stipulation which is essential to the main purpose of the contract. Its breach gives a right to the buyer to treat the contract repudiated. Warranty: A stipulation collateral to the main purpose of contract. Its breach gives rise to a claim of damages.

DOCTRINE OF CAVET EMPTOR Means let the buyer beware. In the contract of sale the seller is under no duty to reveal unflattering truths about the goods sold. Exceptions:
Fitness for buyers purpose Sale under a patent or trade mark Merchantable quality Usage of trade Consent by fraud

Rights of unpaid seller A seller of goods is deemed to be an unpaid seller when: The whole of the price has not been paid A

bill of exchange or other negotiable instrument has been received on condition and such condition have been not fulfilled by the reason of dishonour or otherwise.

Rights of an unpaid seller

Against the goods: Where the property in the goods has passed Right of lien Right to stoppage in transit Right to resale Where the property in the goods has not passed Withholding delivery Stoppage in transit Against the buyer personally: Suit for price Suit for damages Repudiation of contract Suit for interest