SOG Sale of Goods Act 1930

Sale of Goods Act,1930
Business Law,
By: Harshit Mehta
Definition of Sale of Goods
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.
[section 4(1)].
A future transfer of good will be agreement to sale
Business Law, By: Harshit Mehta

Essentials of a contract of sale
1. Two parties sec.2(1)
2. Goods sec.2(7)
3. Transfer of property sec.2(11)
4. Price sec.2(10)
It should be a Contract

GOODS Sec.2(7)
• Any movable property o/t actionable
claims , money & Shares.
• Growing crops also excluded & Grass.
• Things attached to the land are also
included

Classification of goods

1. Existing goods { sec. 6(1)} :- goods owned and
possessed by the seller at the time of making the
contract of sale.
– Specific Goods sec. 2(14):- Goods identified and agreed upon
at the time of the making of the contract of sale.
– Ascertained Goods :- goods identified in accordance with the
agreement after the contract of sale is made.
– Unascertained goods:- goods which are not specifically
identified at the time of contract of sale (goods defined by the
description)
2. Future goods sec. 2(6):- means goods to be
manufactured or produced or acquired by the seller
after making the contract of sale
3. Contingent Goods sec. 6(2):- 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”. Business Law, By: Harshit Mehta
Difference
• Sale • Agreement to sale
• Immediate transfer of property • Transfer of property takes
from buyer to seller place in future.
• Existing goods only • Future goods also included.
• Loss falls on buyer • Loss falls on seller.
• Seller can not re-sell the goods • Seller can re-sell the goods.
• General property • Particular property.
• If the buyer becomes insolvent, • If the buyer becomes insolvent
the seller should return the ,the seller can hold the goods
goods to Official Receiver with him.
appointed by court.
• If the seller becomes
insolvent ,the buyer can receive • If the seller becomes insolvent,
the goods by Official Receiver. the buyer only gets dividend &
not the goods.
Conditions Warranty
• Condition is essential to the • Warranty is collateral to the
main purpose of contract main purpose of contract.
• A contract of sale cannot be • The main contract can be

fulfilled unless the condition to fulfilled even if the warranty is
it, is fulfilled. not fulfilled.
• In case of breach of condition, • In case of breach of warranty,

the aggrieved party can reject the aggrieved party can only
the contract claim for damages.
• Breach of condition can be • Breach of warranty can not be

treated as breach of warranty if treated as breach of condition.
the aggrieved party is happy
with compensation.
When conditions become
warranty (sec.13)
1. Voluntary waiver of condition (Sec. 13(1))
2. Acceptance of goods by the buyer (sec. 13(2))
3. By impossibility (sec. 13(3))

Remedies available to the buyer on
breach of condition
If the condition is broken:
1. Buyer can cancel/repudiate the contract and reject the
goods.
2. Treat the breach of condition as breach of warranty and
claim the damages.
3. In 2nd case- he have the rights to recover the damages
only.
4. No remedy is available when fulfillment of condition is
excused by law by reason of impossibility.

Sec.16 - Caveat Emptor
• This means “let the buyer beware”.
• In a contract of sale of goods, the seller is
under no duty to reveal unflattering truths
about the goods sold.
• So, the buyer must examine goods
thoroughly.
• If he depends upon his own judgement &
skill &makes a bad selection, he cannot
blame anybody excepting himself.
Exceptions to Caveat Emptor(CE)
• Fitness for buyer’s purpose - Sec 16(1)
• Buyer expressly or by implication makes known to the seller
the particular purpose for which the goods are required
• Sale under a patent or trade name – Sec 16(1)
• Sale of a specified article under its patent shall reasonably fir
for any particular purpose.
• Merchantable Quality – Sec16(2)
• Goods are purchased by description, and provided goods are
not of a merchantable quality then the doctrine of CE n/a.
• Usage of trade – Sec 16(3)
• Consent by fraud
• Sale by sample sec. 17
• misrepresentation
TRANSFER OF PROPERTY

Doctrine of nemo dat quod non
habet - Sec 27
• The above maxim ie.quote means-:
• “No one can give something which he does not
possess.”
• If the seller has no title to the goods which are

sold ,the buyer of such goods also does not
acquire the title of goods though he has
purchased the goods & acted honestly.

UNPAID SELLER (SEC. 45)
1. When the whole price has not been paid
2. When a bill of exchange has been issued and
conditions of payment has been dishonoured
3. Whole of the price has not been paid
4. when a bill of exchange or other negotiable
instruments has been received towards payment
and that has been dishonoured.
Ex. A sold certain goods to B for Rs. 2000. and B paid 1500
and failed to pay the balance. Here A is Unpaid seller.
Ex. A sold goods to B for 500. B made payment by cheque,
and cheque was dishonoured.

Rights of Unpaid Seller

Remedies for breach of contract of sale
Remedies to seller:
1.Suit for price Sec.(55)
2.Suit for damages for non performance of goods Sec.(56)
3.Suit for damages for repudiation of contract Sec.(60)
4.Suit for interest Sec.(61)
Remedies to buyer:
1.Suit for damages for non delivery of goods Sec.(57)
2.Suit for damages for repudiation of the contract Sec.(60)
3.Suit for specific performance Sec.(58)
4.Suit for breach of warranty Sec.(59)
5.Suit for interest Sec.(61)

Internal Test Time: 1 hr.
Business law Marks: 20
Q1. Define the sale of goods. And What are the Essential elements for the
contract of sale of goods?
Q.2. Difference Between Sale And Agreement to Sale? Any 6 Points.
Q.3. define what is condition And Warranty? Difference between Condition

and warranty.
Q4. What do you mean by CAVEAT EMPTOR? What are the Exceptions to
Caveat Emptor.

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Sale of Goods Act,1930

A contract of sale of goods is a contract whereby

A future transfer of good will be agreement to sale

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

• A contract of sale cannot be • The main contract can be

• In case of breach of condition, • In case of breach of warranty,

• Breach of condition can be • Breach of warranty can not be

2. Acceptance of goods by the buyer (sec. 13(2))

3. By impossibility (sec. 13(3))

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

• If the seller has no title to the goods which are

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

Business Law, By: Harshit Mehta

Q.2. Difference Between Sale And Agreement to Sale? Any 6 Points.

Q.3. define what is condition And Warranty? Difference between Condition

Business Law, By: Harshit Mehta

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