Sale of Goods Act 1930
Sale of Goods Act 1930
Sale of Goods Act 1930
1930
Sec. 2 - Definition
1. Buyer means a person who buys or agrees to buy goods
2. Delivery means voluntary transfer of possession from one
person to another
3. Deliverable state goods are said to be in deliverable state
when they are in such state the buyer would under the
contract be bound to take delivery of them.
4. Documents of title to goods includes a bill of lading, dock
warrant, warehouse keepers certificate, Wharfingers
certificate, railway receipt, multimodal transport document,
warrant of order for the delivery of goods and any other
document used in ordinary course of business as a proof of
possession or control of goods, or authorising either by
endorsement or by delivery, the possessor of the document
to transfer or receive the goods.
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Sec. 2 - Definition
5.
6.
7.
Sec. 2 - Definition
8.
9.
4.
Section
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Sale
Agreement
to Sale
Examples:
and
Essential Requisites of
Sale
In the case of (State of Madras Vs Gannon Dunkerley and
Company Limited, 1958) the Supreme Court has held that
in order to constitute a sale,
Statutory Transactions
Whether Sale
In the case of M/s. Vishnu Agencies (Pvt). Ltd. V/s. Commercial
Tax Officer Eluru AIR 1978 S.C. 449,
When essentials goods are in short supply, various types of
orders are issued under the Essential Commodities Act, 1955,
with a view to making the goods available to the consumer at a
fair price. Such orders may lay down the requirements of holding
a licence for dealing in the commodity and getting a permit for
obtaining the commodity. The permit holder can obtain the
supply of the essentials goods, to the extent of quantity for which
permit is granted, from the named dealer at a controlled price.
The question which came up before a seven bench judge of the
Supreme Court was whether such a transaction amounts to a
sale in the language of the law.
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Statutory Transactions
The
Supreme Court held
that
Whether
Sale
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1.
2.
3.
The basis of distinction between the Sale and Hire purchase was
explained by the House of Lords in the case of Helby V/s.
Matthews
Helby let a piano on hire to Brewster on the following terms:
Brewster should pay 10s 6d every month
Should he punctually pay 36 monthly instalments, the piano
should become his property, until then it should continue to be the
property of Helby.
Brewster has the right to terminate the hire at any time by
returning the instrument to Helby.
After paying a few instalments Brewster pledged the instruments
with the defendant Matthews, who acted in good faith. Helby
sued Mathews to recover the instrument.
It was held that Brewster could not do so. Brewster was not in
possession having agreed to buy the piano, but under a hire
purchase agreement and therefore had no right to pledge.
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1.
2.
Existing or future
goods.-
According to Sec. 6
(1) The goods which form the subject of a contract of
sale may be either existing goods, owned or
possessed by the seller, or future goods.
(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.
(3) Where by a contract of sale the seller purports to
effect a present sale of future goods, the contract
operates as an agreement to sell the goods.
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a.
b.
c.
d.
Existing or future
The statutory definition
of future goods refers to goods to be
goods.manufactured or produced or acquired by the seller after the
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1.
2.
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For example -Contract for the sale of a horse on the condition that the
buyer should have it for 8 days for trail and be at liberty to return it at
the expiration of that period if he did not find it suitable. The horse dies
without any fault on the part of either party 3 days after it has been
delivered to the buyer for trial. The contract is avoided.
In the case of Howell V/s. Coupland, the defendant agreed to sell to the
plaintiff 200 tons of potatoes to be grown on the land belonging to the
defendant. The defendant sowed sufficient land to grow more than 200
tons, but without any fault in him, a disease attached the crop and he
was able to deliver only about 8 tons. The agreement was held to
become void.
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Ascertainment of price
According to 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 the course of dealing between the
parties
Where the price is not determined in accordance
with the foregoing provisions, the buyer shall pay the
seller a reasonable price. What is a reasonable
price is a question of fact dependent on the
circumstances of each particular case.
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Ascertainment of price
Agreement to sell at
valuation
Stipulation as to time of
payment
Stipulations as to time of
As punctual payment does
not go to the whole consideration of the
payment
sale, the failure by the buyer to pay on the appointed day does not as
Stipulations as to time of
performance of other terms
Stipulations as to time of
performance of other terms
1.
2.
3.
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Stipulations as to time of
performance of other terms
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Stipulations as to time of
performance of other terms
Waiver of the
stipulations
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2.
3.
4.
1.
Express Conditions
1.
Express Conditions
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2.
Express Warranties
There may also be, and there occur in common practice, auxiliary
promises or undertakings of which the breach is not intended to avoid the
contract, but only to give a remedy in damages. These are warranties in
the proper sense, as defined in sub-s (3). Whether a statement is to be
regarded as warranty must be objectively ascertained by asking whether
adopting the standard of a reasonable man, the other party assumed that
the representor was to be regarded as undertaking legal liability for his
assertions. The importance of the statement, the relative knowledge and
means of knowledge of the parties, and the possibility of verification are
the relevant factors which would indicate whether the statement is a
warranty. Thus, statements may be warranties when made by dealers,
though they would not be warranties if made by private sellers; for the
dealers may be in possession of special knowledge, expertise and means
of information not available to ordinary persons.
In the case of Harrison V/s. Knowles and Foster, the plaintiff bought two
small ships from the defendant relying upon particulars furnished by the
Defendant that the dead weight capacity of each ship was 460 tons. The
capacity was if fact only 360 tons. The Plaintiff sought to reject the ships. It
was held that the representation of capacity was not a condition but a
warranty, for which the plaintiff could have sued in damages.
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3.
Representations
4.
5.
Puffs
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2.
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Implied undertaking as to
tile
a)
b)
c)
Sale by description
2.
Sale by sample
a)
b)
c)
Transfer of Property as
Between Seller and Buyer
Section 18 Goods must be
Goods mustascertained
be ascertained: where there is
1.
2.
3.
4.
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3.
The risk usually passes with the property, but may pass
independently of it. Thus, acceptance of the delivery
warrant for a certain quantity of spirit out of a larger bulk
which was liable to deteriorate in storage was held to put
the risk of deterioration on the buyer, although he had
acquired, not property but only undivided interest in the
whole bulk.
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4.
Identification of the
goods
The contract itself may provide that the property shall pass on
the happening of some specified event, sufficient to identify the
goods.
Ascertained goods
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Section 22
Examples
This section may be illustrated by the following examples:
1. Sale of a stack of bark at a certain price per ton, the bark
to be weighed by the sellers and buyers agents. Part
was weighed and taken away, but before anything more
was done a flood carried away the remainder. The loss of
this fell on the seller. Simmons Vs Swift (1826)
2. Sale of 289 specified bales of goatskin, containing 5
dozen in each bale, at a certain price per dozen. By the
usage of the trade, it was the sellers duty to see whether
the bales contain the number specified in the contract.
Before the seller had done this the bales were destroyed
by fire. The loss fell on the seller. Zagury vs
Furnell(1809)
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1.
2.
Section 23 : Sale of
unascertained goods and
Where there isappropriation.
a contract for the sale of unascertained or future
goods by description and goods of that description and in a
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1.
2.
Section 23 : Sale of
unascertained goods and
Example
appropriation
This section may be illustrated by the following example:
Sale of 20 barrels of sugar out of a larger quantity. The
seller fills four barrels which the buyer takes away.
Subsequently the seller fills sixteen more barrels, and
informs the buyer of this asking him to come and take
them away. The buyer promises to do so. The property
has passed to the buyer.
Mr A contracts to sell to Mr B a certain quantity of liquor
out of a big cask containing a much larger quantity. The
required quantity is not separated or bottled. The
property in the liquor does not pass to the purchaser.
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Unless otherwise agreed, the goods remain at the sellers risk until
the property therein is transferred to the buyer, but when the
property therein is transferred to the buyer, the goods are at the
buyers risk whether delivery has been made or not.
Examples
The defendant contracted to purchase 30 tons of apple juice. The
plaintiff crushed the apples, put the juice in casks and kept it
pending delivery. The defendant delayed taking delivery and the
juice went putrid and had to be thrown away. The defendant was
liable to pay the price; the seller had been in a position to sell the
goods elsewhere and acquire other goods for the postponed time of
delivery and he had not done so and there was some loss in the
meanwhile, the responsibility for the loss would have fallen on him,
but in the present case the seller had to keep the goods ready for
delivery as and when the buyer proposed to take them. Demby
Hammilton & Co. Ltd. Vs. Barden (Endeavour Wines Ltd) 1949
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Examples
The section may be illustrated by the following examples:
Sale of a quantity of goods lying at a wharf. The seller left an order
with the wharfinger to deliver the goods to the buyer, who had paid
for them by a bill. The buyer subsequently weighed the goods and
took away part of them. This was held to amount to a delivery of
the whole of the goods.
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Apart from any express contract, the seller of the goods is not
bound to deliver them until the buyer applies for the delivery
When the buyer applies for delivery and the seller then fails to
deliver, the seller is guilty of a breach of contract. So where the
contract provided for delivery in all November on seven days
notice from the buyer, and the buyer gave the notice early in
November, it was held that by the terms of the contract the buyer
had the right to fix the date in November on which the delivery
should be made, and the seller having failed to deliver as required
by the notice, was guilty of a breach of contract. Juggernath
Khan Vs. Machlachar (1881)
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2.
3.
4.
5.
Whether it is for the buyer to take possession of the goods or for the
seller to send the goods to the buyer is a question depending in each
case on the contract, express or implied, between the parties. Apart
from any such contract, goods sold are to be delivered at the place at
which they are at the time of the sale, and goods agreed to be sold are
to be delivered at the place at which they are at the time of the
agreement to sell., if not then in existence, at the place at which they
are manufactured or produced.
Where under the contract of sale the seller is bound to send the goods
to he buyer, but no time for sending is fixed, the seller is bound to send
them within a reasonable time.
Where the goods at the time of sale are in the possession of a third
person, there is no delivery by seller to buyer unless and until such
third person acknowledges to the buyer that he holds the goods on his
behalf
Demand or tender of delivery may be treated as ineffectual unless
made at a reasonable hour. What is reasonable hour is a question of
fact.
Unless otherwise agreed, the expenses of and incidental to putting the
goods into a deliverable state shall be borne by the seller
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1.
Examples
The section may be illustrated by the following examples :
Sale of 12 puncheons of rum, made from molasses, of which 4 were
delivered. The buyer pressed for delivery of the remainder, but the
seller delayed and in the meanwhile an Act of Parliament was
passed prohibiting the distillation of spirits from molasses, and
annulling all contracts for the sale of such spirits. The sellers were
held liable in damages as having failed to deliver within a reasonable
time. Phillips Vs. Blair and Martin (1801)
2.
3.
Sale of goods for ready money. The seller packs them up in the
buyers boxes in the buyers presence, but they remain in the sellers
premises. This is not a delivery. Boulter Vs. Arnott (1833)
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2.
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Examples
The section may be illustrated by the following examples :
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Example
The section may be illustrated by the following
example :
Sale of goods to be delivered by instalments, each
instalment to be paid for in cash fourteen days after
delivery. During the currency of the contract, the
buyer becomes insolvent and the price of one
instalment is unpaid. The seller need not make
further deliveries unless the price of that instalment
is paid and cash is paid against delivery of
subsequent instalments.
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(b)
(c)
2.
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Examples
This section may be illustrated by the following examples:
Goods were sold and sent by the sellers at the request of the
buyer to shipping agents of the buyer, and were put on board a
ship by those agents. Subsequently, they were re-landed and
sent back to the sellers for the purpose of re-packing. While they
were still in the possession of the sellers for that purpose, the
buyer became insolvent. Thereupon the sellers refused to deliver
them to the buyers trustee in bankruptcy except upon payment
of the price. Held, that the sellers had lost their lien by delivering
the goods to the shipping agents, and their refusal to deliver the
goods to the trustee was wrongful. Valpy Vs. Gibson 1847
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2.
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Examples
The section may be illustrated by the following
examples :
An unpaid seller stops goods sent by sea at a port
short of their destination. He is liable for the fright, not
only to the part where the goods were actually landed,
but also to the port of their ultimate destination. Booth
& Co. vs. Cargo Fleet Iron Co. Ltd. 1916
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Where goods are put up for sale in lots, each lot is prima facie
deemed to be the subject of a separate contract of sale ;
2.
3.
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5.
6.
if the seller makes use of pretended bidding to raise the price, the
sale is voidable at the option of the buyer.
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