 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. Sec.4(1)
 There may be a contract of sale between one

part owner and another.

 A contract of sale may be absolute or

conditional.
 A contract (all essentials of valid contract
applicable)
 Between two parties
 To transfer or agree to transfer the property
 In goods
 For a price, i.e. the consideration is money.
 Transfer of property means transfer of
ownership. Mere transfer of possession can
not be termed as a sale.
 Sec.2(11) ‘Property means general property in

goods and not merely a special property.’

 General property means all ownership rights

and special property means limited rights.

 Sec.2(7). ‘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 severed before sale or under contract of
sale.’
 Existing goods- Sec.6(1) these are the goods
which are in existence and are physically present
in the sellers possession. They are further
classified as
 Specific goods- 2(14) – these are the goods
identified and agreed upon at the time the
contract is made.
 Ascertained goods- these are identified after the
formation of the contract.
 Unascertained goods- these are the goods which
are not specifically identified or agreed upon at
the time of the contract of sale.
 Future goods -sec.2(6) and Contingent goods
6(2)
Future goods
A railway administration entered into a
contract for sale of coal-ash that may be
accumulated during the period of contract

Contingent goods
A agrees to sell specific goods to B to be
delivered on the arrival of particular ship.
If the ship arrives but with no such goods
on board ,the seller is not liable.
The consideration for the contract of sale must
be money. If goods are exchanged against
goods the transaction is barter and not covered
by the act. However consideration may be partly
in money and partly in goods.
NO SPECIAL FORMALITIES ARE REQUIRED FOR
CONTRACT OF SALE. IT MAY BE IN WRITING OR
ORAL OR IMPLIED.
 Price is mentioned in the contract.

 The manner of fixing the price is mentioned

in the contract.

 It is determined by the course of dealings of

the parties. When price is not fixed by any of
the above modes a ‘reasonable price’ is
considered as the price of the contract.
 When property is transferred from seller to
buyer at the time of formation of contract, an
absolute sale occurs.
 When property in the goods is to be

transferred at some future date and not at the

time of contract, the contract of sale is
termed as an agreement to sell.
  Rights of seller in case of
 Nature of contract- breach-suit for the price
executed / executory. of goods / Damages.
 Transfer of property-  Right to resell- not
immediate / future date. available. / may resale but
 Nature of rights of buyer- liable for damages.
jus in rem / jus in  Insolvency of seller- buyer
personem can recover goods / if
 Rights of buyer in case of price already paid
breach-recovery of goods, proportionate amount can
specific performance / be recovered.
Damages.  Insolvency of buyer- if
 Risk of loss- buyer’s / price is not paid
seller’s proportionate amount can
be recovered. delivery of
goods can be demanded./
seller can refuse delivery
unless full price is paid.
 The possible causes of perishing of goods:-
1. Physical destruction of goods.
2. Damage of goods in such a manner that
they loose their commercial value.
3. Loss of goods by theft.
4. Lawful acquisition of goods by government.
 Goods perishing before formation of the
contract.- in case of specific goods such
contract is void ab initio as the performance
of the contract is impossible due to
destruction of subject matter.
 Goods perishing before the sale but after

the agreement to sell.:- in case of specific

goods the contract of sale becomes void
and both parties are excused from the
performance. (Sec.8)
 Effect of perishing of future goods.:- Sec.8
applies in this case also which says ‘where
there is an agreement to sell specific goods,
and subsequently the goods without any fault
on the part of the seller or buyer perish or
become so damaged as no longer to answer
to their description in the agreement before
the risk passes to the buyer, the agreement is
thereby avoided.’
 When time is stipulated regarding the payment of
price :- Time of payment is not considered the
essence of the contract unless a different
intention appears from the terms of the contract.
Thus if payment is not made in time the seller can
not avoid the contract but can claim damages.
 When time is stipulated regarding delivery of

goods:- time of delivery of goods is normally not

considered essence of the contract unless
specified in the contract. Thus in the latter case
non performance at stipulated time will render the
contract voidable at the option of the buyer.
 Price is mentioned in the contract.

 The manner of fixing the price is mentioned

in the contract.

 It is determined by the course of dealings of

the parties. When price is not fixed by any of
the above modes a ‘reasonable price’ is
considered as the price of the contract.
A condition is a stipulation which is essential to
the main purpose of the contract. It goes to the
root of the contract. Its non fulfillment upsets
the very basis of the contract
 Conditions as to title
 Condition in case of sale by description
 Condition in case of sale by sample
 Condition in case of sale by description and

sample
 Condition as to quality or fitness
 Condition as to merchantable quality
 Condition as to wholesomeness
 Condition implied by custom
A warranty is a stipulation which is
collateral to the main purpose of
the contract. it is not of such vital
importance as a condition is.
 Warranty as to quiet possession
 Warranty of freedom from encumbrances
 Warranty as to quality or fitness for a

particular purpose annexed by usage of

trade.
 Warranty to disclose dangerous nature of

goods
 Essential vs. collateral
 Rights in case of breach
 Treatment of condition as warranty and vice

versa
 Meaning :Buyers be-aware
 As to quality of goods
 As to the quantity of goods
 As to the necessary services provided by the

goods
 As to justifiable price of the goods.
H sold 32 pigs by way of auction to W “with all
faults of errors of description”. W knew that the
pigs were suffering from swine fever. The sale
is good and H is not liable for any damages.
(Wards vs. Hobbs)
 Mis-reprentation by seller
 Concealment of latent defect
 Fitness as to particular purpose
 Sale by description or sample
 Merchantable quality
 Goods must be ascertained

 Property passes when intended to pass

 Specific goods in a deliverable state

 Specific goods to be put into a deliverable state

 When the seller has to do ascertain price

 When goods are to be measured, tested, etc.

 Unconditional Appropriation

 Delivery to the carrier

 Goods sent on approval or “on sale or return”

1. Risk passes with property

2. Who can take action?

3. What is the effect of insolvency?

A voluntary transfer of possession from one
person to another.
1. Actual Delivery – the goods are physically
handed over to the seller.

2. Symbolic Delivery – specific goods are locked

in the godown and the seller gives the key of
the godown to the buyer.

3. Constructive Delivery – the delivery of the bill

of lading with which goods may be obtained.
 Delivery

 Risk of deterioration in the goods

 Damages for non-delivery

 Specific performance
 Payment of Price

 Compensation

 Delivery

 Interest and Special Damages

When the whole of the price has not been paid;

When a bill of exchange or other negotiable

instrument has been received as conditional
payment, and

The condition on which it was received has not been

fulfilled by reason of the dishonor of the instrument
 Right

Against the
Against the
buyer
goods
personally

Where the
Property in Where the property Suit
Suit for Repudiation Suit for
the goods in the goods for
has has not passed Damages of contract interest
price
passed

Stoppage in Withholding
transit delivery

Stoppage
Re-sale
in transit