Sale of Goos Act
Sale of Goos Act
Sale of Goos Act
. The Sale of Goods Act 1930 contains the law relating to sale of
goods ,prior to this act the law of sale of good was contained in
chapter VII of the Indian contract Act. 1872.
The general principal of Indian contract act which applies to
contracts are applicable to the sale of goods act also but some
of special feature of sale of contract such as condition and
warranties and that of transfer of ownership and passing of
liability thereof from seller to buyer is governed by the Sale of
Goods Act 1930.
Meaning of Contract of Sale of goods
1- Two parties - There must be two distinct parties I.e. , a buyer and a seller, to
effect a contract of sale and they must be competent to contract.
3- Price - The consideration for the contract of sale, called price, must be
money. When goods are exchanged for goods, it is not a sale but a barter.
1- Transfer of property - In a sale, the property in the goods passes from the
seller to the buyer immediately so that the seller is no more the owner of the
goods sold. In an agreement to sell the transfer of property in the goods is to
take place at a future time or subject to certain conditions to be fulfilled In
this sense a sale is an executed contract and an agreement to sell is an
executory contract
2- Type of goods - A sale can only be in case of existing and specific goods
only. An agreement to sell is mostly in case of future and contingent goods
although in some cases it may refer to unascertained existing goods.
3- Risk of loss - In a sale, if the goods are destroyed, the loss falls on the
buyer even though the goods are in the possession of the seller. In an
agreement to sell, if the goods are destroyed, the loss falls on the seller,
even though the goods are in possession of buyer.
DISTICTION BETWEEN SALE AND AGREEMENT TO SALE
Good’s form the subject matter of a contract of sale. Goods mean every
kind of movable property other than actionable claims and money. And
include stock and shares growing crops, grass and thing attached to or
forming part of the land which are agreed to be severed before sale or
under the contract of sale [sec.2 (7)] Goods may be
Classification of Goods
(1) existing goods i.e., goods which are owned and possessed by the seller
at the time of sale. These goods may be specified, ascertained or
unascertained.
(2)Future goods, i.e., goods which will be acquired, manufactured or
possess at the time of contract and the time of the contract and which
will be acquired, manufactured or produced by him at some future date.
(3)Contingent goods i.e. goods the acquisition of which of which by the
seller depends upon a contingency which may or may not happen.
• Specific goods-These are goods which are identified and agreed
upon at the time a contract of sale is made [Sec. 2 (14)) as.
for example a specified watch, dog or horse.
• Unascertained or generic goods. These are the goods which are not
identified and agreed upon at the time of the contract of sale. They
are identified only by description and may from part of a lot.
• contingent goods.
A contract for the sale of specific goods is void if at the time when the
contract was made the goods have without the knowledge of the
seller, perished. The same would be the case where the goods
become so damaged as no longer to answer to their description in
the contract. This rule is based on the ground of mutual mistake or
impossibility of performance .
• Express Conditions
• Express Warranties
• Implied conditions
• Implied warranties
Implied condition
• Condition as to title
• Sale by description
• Condition as to quality and fitness
• Condition as to merchantability
• Condition implied by custom
• Sale by sample
• Condition as to wholesomeness
Condition as to title
• In a contract of sale, unless the circumstances , or the
contract are such as to show a different intention, there
is an implied condition on the part of the seller that-
• Example.
A place order for some lorries to be used "for heavy traffic in a hilly
area“ to B who is dealer of such types of lorries only , The lorries
supplied were unfit and broke down There is breach of condition as
to fitness.
Condition as to merchantability
• Where goods are bought by description from a seller who deals in goods of that description
whether he is the manufacturer or producer or not, there is an implied condition that the goods are
of merchantable quality. This means goods should be such as are commercial saleable under the
description by which they are known in the market
• Example
A manufacturer supplied 600 horns under a contract. The horns were found to be dented,
scratched and otherwise of faulty manufacture. Held, they were not of merchantable quality
A radio set was sold to a layman. The set was defective. It did not work in spite of repairs. Held
the buyer could return the set and claim refund.
Condition implied by custom
• Where a person sells goods, knowing that the goods are inherently
dangerous or they are likely to be dangerous to the buyer and that
the buyer is ignorant of the danger, he must warn the buyer of the
probable danger, otherwise he will be liable in damages.
• Consent of Fraud