THE SALES OF GOODS ACT,

1930

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 THE ACT
• In 1930, Sec. 76 to 123 of Indian Contract Act
were taken out and a separate act was created
that is the Indian Sale of Goods Act, 1930. It
came into force on 1st July, 1930. With effect from
22nd September 1963, the word Indian was also
removed. Now, the present Act is called ‘The
Sale of Goods Act, 1930’. This Act extends to
whole of India except the state of Jammu &
Kashmir.

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Meaning
• According to sec. 4(1) of the Sale of Goods
Act, 1930, “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.”

• It includes both a sale as well as an

agreement to sell.

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 Essential elements of contract of sale
• Seller & buyer
• Goods
• Transfer of property
• Price
• Essential elements of valid contract

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SELLER & BUYER
• A sale has to be bilateral because the property in
goods has to pass from one person to another.
The seller and buyer must be different persons.
A person cannot buy his own goods. However, a
pert-owner may sell to another part-owner.

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GOODS
• Sec.2(7). ‘Goods means every kind of
movable property other than property of
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.’

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Classification of goods
• Existing Goods: Are those goods which are
owned or possessed by the seller at the time of
the contract
• Specific or Ascertained goods: Means goods identified
and agreed upon at the time of a contract of sale is made
• Goods are said to be ascertained when out of a mass of
unascertained goods, the quantity extracted for is
identified and set aside for a given contract.
• Unascertained Goods: These are the goods which are
not identified and agreed upon at the time when a
contract is made.

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• Future Goods: means goods to be
manufactured, or produced or acquired by
the seller after making of the contract of sale.

• Contingent Goods: These are the goods the

acquisition of which by the seller depends
upon a contingency which may or may not
happen. Contingent goods is a part of future
good.

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 Transfer of property
• Property means general property in goods and
not merely a special property in goods.
General property in goods means ownership of
the goods. Special property in goods means
possession of goods. There must be either a
transfer of ownership of goods or an
agreement to transfer the ownership of goods.

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 Price
• The consideration in a contract of sales has
necessarily to be money. However, the
consideration could be partly in money and
partly in goods

• Different cases of consideration that do not

amount to sale:
• Barter
• Gift
• Some act in return of goods

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Essential elements of a valid contract
• A contract to sale must conform to all the other
essentials of a valid contract.
• Offer and acceptance
• Legal consideration
• Capacity to contract
• Intention to create legal relations
• Free consent
• Certainty and possibility of performance
• Lawful object
• Legal formalities

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Absolute or conditional
• A contract of sale may be absolute or
conditional according to the desire of the
buyer and the seller.

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Sale & Agreement to sell
• Where under a contract of sale, the property
in the goods is transferred from the seller to
the buyer, it is called a sale.

• Agreement to sell means a contract of sale

under which the transfer of property in goods
takes place at a future data or subject to
some conditions thereafter to be fulfilled.

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