Sale of Goods Act 1930

SALE OF GOODS ACT 1930
The law relating to sale of goods is contained in the sales of goods act 1930.
Which came into force on 1st July 1930.
Sale of goods act are applicable only to those things which can be called goods.
Sale of immovable property is governed by the transfer of property act 1882
22-09-2017 Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI
GOODS
According to sec 2(7) Goods means (i) every kind of movable property other than actionable
claims and money and includes (ii) stock and (iii) shares, (iv) growing crops, grass and (v) things
attached to or forming part of the land which are agreed to be served before sale or under
the contract of sale.
Actionable claim means debt
CLASSIFICATION OF GOODS
1. existing goods
2. future goods
3. contingent goods.
Existing Goods- goods owned and possessed by the seller at the time of making the contract
of sale are called existing goods etc.
It is classified into-
(a) specific goods- goods identified and agreed upon at the time of the making of the contract of
sale are called specific goods.
ex- specified TV, CAR etc.
(B) Ascertained goods- ascertained goods identified in accordance with the agreement after the
contract of sale is made. The identification takes place at a later made.
For example if a merchant agrees to supply one bag of sugar from his godown to a buyer, it is a
sale of unascertained goods because it is not known which bag will be delivered.
( c)unascertained goods- the goods which are not specifically identified at the time of contract of
sale are known as unascertained goods.
2. FUTURE GOODS
2.Future goods -means good to be manufactured or produced or acquired by the seller after
making the contract of sale.
3.Contingent goods- contingent goods are future goods. According to 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
Example- A agrees to sell B a certain paintings provided he is able purchase it from its present
owner. This is an agreement for the sale of contingent goods.
CONTRACT OF SALE
Sec 4(1) of the sale of goods act defines a contract of sale of goods as a contract whereby
the seller transfer or agrees the property in goods to the buyer for a price
Here the property means right of ownership.
Section 4(3) states where under a contract of sale the property in the goods is transferred
from the seller to the buyer, the contract is called a sale, but where the transfer of the
property in the goods is to take place at the future time or subject to some condition
thereafter to be fulfilled, the contract is called an agreement to sell.
Thus it includes both sale as well as an agreement to sell.
Ex- A sells his bike for rs 10,000 to B.It is a sale as the ownership of the bike has been
transferred to B by A for a price.
ESSENTIALS OF A CONTRACT OF SALE
1. Two parties- to constitute a contract of sale, there must be a transfer or agreement to

transfer the property in goods by the seller to the buyer. Two parties seller and buyer.
2. Goods- the subject matter of the contract of sale must be goods.
3. Transfer of property- property here means ownership. In every contract of sale, the
ownership of goods must e transferred by the seller to the buyer or there should be an
agreement by the seller to transfer the ownership to the buyer.
4. Price- the term price is defined in section 2(10) as price means the money consideration for
a sale of goods
5. Contract- all the essential elements of a contract must be present in a contract of sale. The
word contract means an agreement enforceable at law.
SALE AND AGREEMENT TO SELL-
DIFFERENCE
SALE AG R E E M E N T TO S E L L -
1.Nature- A sale is executed contract. An agreement to sell is an executory
contract.
2.Transfer of property- the property in the
goods passes from the seller to the buyer The transfer of property in the goods is to
immediately. take place at a future.
If the goods are destroyed, the loss falls on
3.Risk of loss-if the goods are destroyed, the
the seller .
loss falls on the buyer
The liability remains with the seller where
4 liability- a subsequence loss or destruction the seller where the transaction only
of the goods is the liability of the buyer. amount to an agreement to sell.
5. performance- performance of sale is Performance is conditional and is made in
absolute and without any condition. future.
6.Right of resale- the property is with the The property in the goods remains with
buyer and as such the seller cannot resell the seller and he can dispose of the goods
the goods as he likes.
DOCUMENTS OF TITLE TO GOODS-
SECTION 2 (4)
A document of title to goods is one, which entitles its rightful holder to deal with the goods
represented by it, as if he were the owner.
It is uses in the ordinary course of business as proof of the ownership, possession or control
of goods.
LIST OF DOCUMENTS ARE:
Bill of lading- a bill of lading is a receipt given by the ship owner acknowledging the receipt of
goods for carriage.
Dock warrant- a dock warrant is a document which is uses by dock or wharf owner. It is uses
at the request of the merchant who contains the details regarding- (1)weight (2) measurement
of specific parcel of goods (3) a declaration or certificate by the owner.
Warehouse-keepers certificate- warehouse is a building in which goods are stored.
Warehouse-keepers certificate is a document which is issued by the warehouse-keeper.
Wharfinger certificate- wharfinger is a person who is the owner or keeper of a wharf for the
purpose of receiving goods in order to ship them.
CONDITIONS AND WARRANTIES
[SECTIONS 11-17]
Sec 12(2) of Sales Of Goods Act, 1930 has defined Condition as:
A condition is a stipulation essential to the main purpose of the contract, the breach of which
gives rise to a right to treat the contract as repudiated.
example-A buys from B a hairOIL advertised as pure coconut oil.The oil turns out to be mixed with
herbs. A can return the oil and claim the refund of price.
Sec 12(3) of Sale Of Goods Act, 1930 has defined Warranty as :
A warranty is a stipulation collateral to the main purpose of the contract, the breach of which
gives rise to only claim for damages but not to a right to reject the goods and treat the
contract as repudiated.
Example- while selling his car to B, stated the car gives a mileage of 12 kms per litre of petrol.The car
gives only 10 kms per litre. B cannot reject the car. It is breach of warranty. He can only claim
damages for the loss due to extra consumption of petrol.
1.WHEN CONDITION TO BE TREATED
AS WARRANTY
A condition is treated to be a warranty and the aggrieved party has the right to claim damages
only and not to repudiate the contract under the following circumstance:
(a) Voluntary waiver of condition( sec 13 (1)- where a contract of sale is subject to any condition
to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the
condition as a breach of a warranty and not as ground for treating the contract as repudiated.
Example-A agrees to supply B 10 bags of first quality sugar @rs 1000 per bag, but supplies only
second quality of sugar, the price of which is rs 950 per bag. This is a breach of condition. The
buyer can reject the goods. But if the buyer elects to accept the goods ( treating it as a breach
of warranty) and claim for damages @ rs 50 per bag.
2. ACCEPTANCE OF GOODS BY BUYER
Where a contract of sale is not severable and the buyer has accepted the goods or part
thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach
of warranty.
DOCTRINE OF CAVEAT EMPTOR
Caveat Emptor is a fundamental principle of the law of sale of goods

It means "Caution Buyer", i.e. "Let the buyer beware
EXCEPTIONS TO THE DOCTRINE OF
CAVEAT EMPTOR
1.In case of misrepresentation by the seller-
2.In case of Concealment of Latent Defect-
(concealment means prevent from being seen or discovered)
When the seller has deliberately concealed a defect, which is not apparent on the reasonable
examination of the goods.
3. Fitness for Buyers purpose- when the seller is a manufactures or a dealer of the type of goods,
sold by him and the buyer has communicated to him the purpose for which the goods are
required and relied upon the skill and judgement of the seller, there is an implied condition that
the goods are reasonbly fit for the purpose for which they are required . This is called condition
as to fitness
4.Merchantable Quality-( merchantable mean fit to be offered for sale)
In the case of goods bought by description from seller who deals in the class of goods, there is
an implied condition that the goods shall be of merchantable quality.
5. In case of sale by description- where the goods are sold by description and the goods supplied
by the seller do not correspond to the description.
6. In case of sale be sample
7. In case of sale by sample as well as description.
PERFORMANCE OF SALES CONTRACT
According to section 31 of the goods act 1930, It is the duty of the seller to deliver the
goods to the buyer and of the buyer to accept and pay for them, in accordance with the terms
of the contract of sale
MEANING OF DELIVERY (SECTION 2(2)
According to section 2(2) of the sale of goods act 1930, Delivery means voluntary transfer of
possession of goods from one person to another
Modes Of Delivery
--Actual Delivery
--Symbolic delivery
---Constructive delivery.
Actual Delivery- where the goods are handed over by the seller to the buyer or his duly
authorised agent, the delivery is said to be actual.
Ex- X sells to Y 100 bags of wheat lying in Z warehouse. X orders to Z to deliver the wheat to
Y. Z delivers to Y. In this case there is an actual delivery of goods.
2.SYMBOLIC DELIVERY
Delivery is said to be symbolic where some symbol of the real possession or control over the
goods is handed over to buyer.
For example- X sells to y 100 bags of wheat lying in Zs warehouse and hands over the key of
Zs warehouse to Y. In this case there is symbolic delivery of goods.
3.CONSTRUCTIVE DELIVERY.
Delivery is said to be constructive where a person who is in possession of the goods

acknowledges holding the goods on behalf of the buyer.
RULES OF DELIVERY OF GOODS
1.Delivery may be either actual or symbolic or constructive (sec 33)

2.Buyer to apply for delivery (sec 35)
3.Place of delivery ( sec 36(1)
4.Time of delivery sec 36(2)
5.Goods in possession of a third party section 36(3)
6.Demand of delivery to be treated as ineffectual ( section 36(4)
7.Expense of Delivery( Section 36(6)
8.Delivery of wrong quantity (section 37)
8(i) Delivery of goods less that contracted for (section 37(1)
8(ii) Delivery of goods in excess of the quantity contracted for
8(iii) Delivery of goods contracted for mixed with other goods (section 37(3)
9. Delivery by installments
10 Delivery to carrier.
ACCEPTANCE OF DELIVERY OF GOODS
1. Mere receipt of goods is not acceptance

2. Buyers right of examination
3.no duty to return the rejected goods- if the buyer has decided to reject the goods, he needs
only to inform the seller about this and not take steps to return the goods, unless otherwise
agreed.
4. Wrongful refusal to take delivery by buyer.
RIGHTS AND AND DUTIES OF A BUYER
Rights of a Buyer-
The following are rights of the buyer-
1. Right to have delivery of goods sec-32
2. Right to reject the goods- sec 37
3. Right not to accept installments- sec 38
4. Right to examine the goods sec 41
5. Right not to returned the rejected goods sec 43
6. Right to the notice of insurance sec 39 (3)- it is the duty of the seller to give notice to the buyer to
enable him to insure the goods during the sea transit. It he fails to do so, the buyer is not liable for
destruction of goods in transit.
DUTIES OF THE BUYER
1. Duty to pay price and accept the goods sec 31

2. Duty to apply for delivery sec 35
3. Duty to demand delivery at a reasonable hour (sec 36(4)
4. Duty to accept instalment delivery and pay for it. Sec (38(2)
5. Duty against deterioration sec 40- unless otherwise agreed, the buyer has to take the risk of
deterioration of the goods incidental to the course of transit.
6. Duty to intimate the seller when reject the goods (sec43)
7. Duty to take delivery sec 44
8. Duty to pay price. Sec 55
UNPAID SELLER SEC 45
The term unpaid seller may be defined as the seller to whom the full price of the goods sold
has not been paid.
Example- A sold certain goods to B for Rs 2000. B paid Rs 1500 and failed to pay the balance.
Here , A is in the position of unpaid seller.
RIGHTS OF AN UNPAID SELLER
An unpaid seller has two-fold rights. They are:
(a) Rights against goods

(b) Rights against the buyer personally.
(A) RIGHTS AGAINST GOODS
Right against goods has classified into two types.

1 where property in the goods passed (sec 46(1)
2. Where property in the goods has not passed sec 46(2)
WHERE PROPERTY IN THE GOODS PASSED
(SEC 46(1)
1. Right of unpaid seller where the ownership of the goods is transferred to the buyer
According to sec 46 of the act, the unpaid seller has three distinct rights even though
property in the goods is transferred to the buyer. These rights are ;(a) right of lien (b) right of
stoppage in transit right of resale.
(A) RIGHT OF LIEN
The word lien means to retain possession of goods and refuse to deliver them to the buyer
until the price due in respect of them is paid or tendered.
An unpaid seller in possession of goods sold is entitled to exercise his lien on the goods in the
following in the following cases.
( a) where goods have been sold without any stipulation as to credit.
(b) where goods have been sold without any stipulation as to credit.
where the buyer become insolvent.
(B) RIGHT OF STOPPAGE IN TRANSIT
The right of stoppage in transit means the right of stopping future transit of the goods while
they are with a carrier for the purpose of transmission to the buyer, resuming possession of
them and retaining possession until payment or tender of the price.
Some of the conditions to stoppage:
( 1) the seller must be unpaid
(2) the buyer must be insolvent
(3) Property in the goods must have passed.
RIGHT OF RESALE
An unpaid seller who has exercised has right of lien and stoppage in transit is also em-powered
to effect resale of the goods.
This resale right is a valuable right given to an unpaid seller. Section 54 of the act has given the
right of resale to an unpaid seller, in the following circumstances.
(a) where the goods are perishable
(b) where unpaid seller gives notice of his intention.
where the seller expressly reserves his right of resale.
.
2.WHERE PROPERTY IN THE GOODS HAS
NOT PASSED SEC 46(2)
In the case where property in the goods has not passed the unpaid seller can:
( 1) Withholding delivery.
(2) Stoppage in transit.
( 1) WITHHOLDING DELIVERY.
Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to
his to his other remedies, a right of withholding delivery similar to and co-extensive with his
rights of lien and stoppage in transit where the property has passes to the buyer.
(2) STOPPAGE IN TRANSIT.
The right of stoppage in transit means the right of stopping future transit of the goods while
they are with a carrier for the purpose of transmission to the buyer, resuming possession of
them and retaining possession until payment or tender of the price
(B) RIGHTS AGAINST THE BUYER
PERSONALLY.
1.Suit for price.- sec 55
2. Suit for damages for non-acceptance. Sec 56
3.Repudiation of contract before due date sec 60.--- where the buyer repudiates the contract
before the date of delivery, the seller may either treat the contract as subsisting and wait till the
date of delivery or he may treat the contract is rescinded and sur for damages.
4. Suit for interest sec61(2).
AUCTION SALE SEC (64)
Auction sale means a public sale where intending buyer assemble at one place and offer the
price at which they are ready to buy the goods.
The offer of the price is known as bid and the person making bid is known as the bidder.

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Sale of Goods Act 1930

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SALE OF GOODS ACT 1930

1. Two parties- to constitute a contract of sale, there must be a transfer or agreement to

Caveat Emptor is a fundamental principle of the law of sale of goods

Delivery is said to be constructive where a person who is in possession of the goods

1.Delivery may be either actual or symbolic or constructive (sec 33)

1. Mere receipt of goods is not acceptance

1. Duty to pay price and accept the goods sec 31

An unpaid seller has two-fold rights. They are:

(a) Rights against goods

Right against goods has classified into two types.

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