SALES OF GOODS ACT ,1930

By….
 SALE OF GOODS
&
AN AGREEMENT TO SELL
 SALE OF GOODS
It is a contract where the ownership in
the goods is transferred by seller to
the buyer immediately at the
conclusion contract
EXAMPLE: A sells his house to B for
Rs. 10,00,000. It is a sale since the
ownership of the house has been
transferred from A to B.
AGREEMENT TO SELL
It is a contract of sale where the
transfer of property in goods is to
take place at a future date or subject
to some condition thereafter to be
fulfilled.
EXAMPLE: A agreed to buy from B a certain
quantity of nitrate of soda. The ship carrying
the nitrate of soda was yet to arrive. This is `an
agreement to sale. In this case, the ownership
of nitrate of soda is to be to transferred to A
on the arrival of the ship containing the
specified goods (i.e. nitrate of soda) [Johnson
V McDonald (1842) 9 M & W 600, 60 RR 838]
 DISTINCTION BETWEEN SALE AND AGREEMENT TO SELL
BASIS SALE OF GOODS AGREEMENT TO SELL
1. Transfer for Property The property in the goods passes to the Since property in the goods does not
buyer and along with the risk. pass to the buyer, the risk also does
not pass to him.
2. Contract Status It is an executed contract. i.e. contract It is an executory contract. i.e. contract
for which consideration has been paid. for which consideration is to be paid
at a future date.
3. Consequences of In a sale the buyer fails to pay the price If there is a breach of contract by the
Breach by Buyer of goods (or) if there is a breach of buyer the seller can only sue for the
contract by the buyer the seller can sue damages and not for the price.
for the price
4. Consequences of Breach on part of seller gives buyer The seller, being still the owner of the
Breach by Seller double remedy; a suit for damages goods, may dispose of them as he
against the seller and a proprietary likes, and the buyer’s remedy would
remedy of recovering the goods from be to file a suit for damages only.
third parties who bought them.
4. Risk of loss A subsequent loss or destruction of the Such loss or destruction is the liability
goods is the liability of the buyer. of the seller.
 TRANSFER OF
TITLE BY NON-OWNER
SECTION – (27 TO 30)
SELLER’S OBLIGATIONS AS TO
DELIVERY,
TIME,
DESCRIPTION,
FITNESS,
QUALITY,
AND
QUANTITY.
GENERAL RULE : NEMO DAT NON HABET
MEANS - No one can give that which he has not
- To protect property rights

EXAMPLES - If A sells some stolen goods to B, who buys them in good faith, B will get no title to that and the true
owner has a right to get back his goods from B.

EXCEPTIONS - To protect the interests of innocent buyers, a number of exceptions have been
provided to this rule.

 Transfer of title by Estoppel.(Sec.27)

 Sale by Mercantile Agent.(Sec. 27)
 Sale by joint owner/co-owner(Sec.28)
 Sale by person in possession under voidable contract. (Sec. 29)
 Sale by a seller in possession after sale.(Sec.30(1))
 Sale by a buyer in possession of goods.(Sec.30(2))
 Sale by an Unpaid Seller.(Sec. 54)
 RIGHTS OF
UNPAID SELLER
AGAINST GOODS
 UNPAID SELLER (SEC. 45)
A seller of goods is deemed to be an unpaid seller when:-

 The whole of the price has not been paid or tendered;

 A bill of exchange or other negotiable instrument has

been received as a conditional payment, and the
condition on which it was received has not been
fulfilled by reason of the dishonour of the instrument
or otherwise.
EXAMPLE
(1) X solds certain goods to Y for Rs. 5,000. Y paid Rs. 4,000 but fails to pay the balance.
X is an unpaid seller.
(2) P sold some goods to R for Rs. 6,000 and received a cheque for a full price. On
presentment, the cheque was dishonoured by the bank. P is an unpaid seller.
 RIGHTS OF
Rights of unpaid seller
UNPAID SELLER

Right against goods Right against the buyer personally

When the property in the Suit for price

goods has been transferred

Right of Lien Suit for damages for non

acceptance
Right of stoppage in
goods in transit
Suit for special damage
Right to resale and
interest
When the property in the
goods has not been transferred

Right of withholding delivery

 RIGHT AGAINST THE GOODS
A. When the property in the goods has been transferred
1. RIGHT OF LIEN[Sec 46(1)(a) and 47 to 49]
means lawfully right to retain the goods possession until the full price is
received.

An unpaid seller can exercise his right of lien in following cases:

• Where the goods have been sold on the cash basis.

• Where the goods have been sold on credit basis and
the term of credit has expired.
• Where the buyer has become insolvent even if the
period of credit has not been expired.
 RIGHT AGAINST THE GOODS
2. RIGHT OF STOPPAGE IN TRANSIT[Sec. 50 to 52]
It means stoppage of goods while they are in transit to take possession
until the price is paid

Unpaid seller can stop the goods in transit in the following cases:

• While the buyer becomes insolvent.

• While the goods are out of actual possession of seller,
but have not reached buyer’s possession i.e. goods are
in transit with career.
• The unpaid seller can stop the goods in transit only for
payment of the price of the goods and not for any
other charges
 RIGHT AGAINST THE GOODS
3. RIGHT TO RE-SALE
If a buyer fails to pay or offer the price within a reasonable time, the unpaid
seller has the right to resell the goods.

Unpaid seller can resale the goods in the following cases:

• Where the goods are of perishable nature.
• Where the unpaid seller has exercised his right of lien or stoppage
in transit and gives a notice to buyer of his intension of resell the
goods.
• Where the unpaid seller has expressly reserved his right of resale.
• Where seller gives notice to the buyer of his intension to re-sell and
the buyer does not pay with in a reasonable time. He can
• Recover loss on resale of the goods, if any
• Retain any surplus on resale of goods, if any
 RIGHT AGAINST THE GOODS

A. When the property in the goods has not been transferred

1. RIGHT OF WITHHOLDING DELIVERY
If the property in the goods has not passed
to the buyer, the unpaid seller cannot
exercise right of lien,
but gets a right of withholding the delivery
of goods, similar to and co-extensive with
lien.
 RIGHT AGAINST THE BUYER

A. SUIT FOR PRICE

Where ownership of the goods has passed to the buyer and the buyer refuses to pay
the price according to the terms of the contract, the seller can sue the buyer for price,
irrespective of delivery of the goods.(Sec. 55).

B. SUIT FOR DAMAGES FOR NON-DELIVERY[Sec.56]

Where the buyer refuses to accept and pay for th e goods, the seller may sue him for
damages for non acceptance. The seller can recover damages only and not the full
price (Sec. 56)

C. SUIT FOR SPECIAL DAMAGES AND INTEREST [Sec.61]

The seller can sue the buyer for special damages where the parties are aware of such
damages at the time of contract. The unpaid seller can recover interest at a reasonable
rate on the total unpaid price of goods, from the time it was due until it is paid. (Sec.
61)