The Sale of Goods Act 1930

By Shweta Bambuwala

Goods?

Applicable to only movable goods.

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 served before sale or under the contract of sale.

Goods may be,1. Existing Goods2. Future Goods

Classification of Goods

Existing Goods means those goods which are already in

existence and which is physically present in some person’s ownership & possession.

1. Specific Goods Those goods which are identified agreed upon at the

time of Contract of sale. Ex.- Painting, ring etc.2. Generic Goods Goods which are not specifically identified but they are

indicated by description at time of sale.

Future Goods Those goods which are to be manufactured or

product after a contract of sale is made.

Contingent Goods Those goods whose acquisition depends on

contingency which may happen or may not happen.

SaleTransfer of goods from buyer to seller.Immediate payment or delivery is not

necessaryPayment and delivery may be done at a

future date.Ownership of goods must be transferred

immediately

Agreement to sale

The transfer of the property in the goods is to take place at a future time subject to some conditions thereafter to be fulfilled is called agreement to sale.

Difference between Sales & Agreement to sale

Transfer of propertyGeneral & Particular PropertyConsequences of BreachTransfer of RiskInsolvency of BuyerInsolvency of Seller

Essentials of valid saleProperty Transfer of general property in goodsMovable GoodsPrice consideration in Money and not in goodsParties Two competent partiesForm May be express or implied

Difference between sale and hire purchase

OwnershipOwner & BaileeTermination of contractPayment

Sale & Bailment

Implied Conditions & Warranties

Conditions

• Conditions are essential to the main purpose of contract

If broken Contract can be cancelled

Damages can be recovered.

It can be Implied or expressive

Warranties Warranties are subsidiary

to contract. If broken Contract can not

be cancelled Damages can be

recovered. It can be Implied or

expressive.

Implied Conditions

1.As to title :2.Sale By

discription :

3.As to Sample:

Seller has right to sale the goods

Goods should correspond with the description

1. The bulk should correspond with the sample

2. Buyer shall have the opportunity of comparison

3. Goods shall be free from defects.

4.Sale of Samples as well as description:

5.As to fitness or quality:

6.As to merchantability:7.As to Wholesomeness:8.Conditions implied by

custom:

Buyer makes seller aware about purpose of buying goods, than it should meet the expectation

May be annexed with usage of trade or custom of the locality

In case of patent no implied conditions exist

Goods should be fit to sell

May be annexed by usage of trade in the locality concerned.

Implied Warranties

Warranties of quite possession

Warranties of Freedom from Encumcrance

Warranty as to fitness Warranty to disclose

dangerous nature of goods

Buyer has right to enjoy quite possession of goods.

Doctrine of Caveat EmptorA Latin Expression means “ Let the Buyer

Beware”

A Fundamental principle explains Buyer should be careful, cautious, must keep his eyes & mind active while buying.

In other words When the buyer purchases the

goods at his own risk, skill and judgment. It is not the duty of the seller to point out the defects in the goods.

Exceptions1. Buyer relies upon the seller who has made a

false representation.2. Seller has intentionally concealed a defect which

is not apparent on the goods.3. When, 1.seller is a manufacturer or a dealer of goods 2.Buyer informs the seller about the purpose for which goods 3.Buyer has relied upon skill and judgment of the seller

4. Sale by description if goods are not of merchantable quality, seller will be held responsible.

Sale by sample , if goods differ from sample, seller will be held responsible.

When due to custom or usage of trade , if quality of goods is not up to mark, seller is liable.

“No seller can give to the buyer a better title to those goods than he himself has”

General Condition as to “Title”.

For promotion of trade & commerce law has provided certain exceptions to this rule.

i.e. Non owner can make a valid sale.

Exceptions

Sale by Mercantile AgentSale by one of the co ownerSale after saleSale before purchaseTitle by EstoppelsSale of goods in possession under a

voidable contract

Sale by an unpaid vendorSale under provisions of ActSale in Market Overt

Buyer

Rights To have delivery as per

contract To reject the goods To repudiate Right to notice of

insurance Right to examine Right against seller for

breach of contract

Duties To pay for goods received To apply for delivery To demand delivery at a

reasonable hour To intimate seller when he

rejects the goods To take delivery To pay damages for non

acceptance

Seller

Rights To receive the price of the

goods To receive compensation

due to rejection of goods To receive reasonable

charge for care Rights of unpaid seller To sue for damages on

buyer repudiating the contract

Duties To deliver the goods

when buyer demands To give reasonable

opportunity to the buyer to examine the goods

To compensate the buyer in case of wrong quantity

To refund the advance in case of non delivery of goods.

Unpaid SellerMeaning ??

Rights against Goods1. Right of lien

1. Right of stoppage in transit

2. Rights of resale

Rights against Buyer1. Suit for price

2. Suit for damages

3. Repudiation of Contract before due date

4. Sue for interest

Remedies for breach of contract of sale

To Seller Suit for price Suit for damages

To Buyer Suit for damages for non delivery of the goods Suit for specific performance Suit for breach of warranty Suit for repudiation of contract

Auction sale

A sale by auction is a public saleAn Auctioneer is an agent of seller

Procedure Falling hammer Knock down

Rules of auction salesGoods put up for sale lotsCompletion of saleRight of seller to bidSale not notified subject to a right to bidReserve priceUse of pretended biddingKnock out or agreement not to bid against

each other