Sale of Goods Act, 1930

Unit V
General

 Act applies to whole of India

except the State of Jammu &
Kashmir
 Contract of Sale of Goods subject
to the general principles of law
relating to contracts (Indian
Contract Act)
Sale & Agreement to Sell

 Sale
 The property in the goods is
transferred from the seller to the
buyer
 Agreement to Sell
 Transfer of property in the goods
is to take place at a future time
 Becomes sale when time elapses
or conditions are fulfilled i.e.
property in goods is transferred
Essentials of Contract of Sale

 Fulfill all essentials of contract

 It is of ‘Goods’
 Transfer of Property is required
 Contract is between buyer and
seller
 Sale should be for ‘Price’
 Contract may be absolute or
conditional
Document of Title to Goods
 Entitles and enables its rightful
holder to deal with the goods
represented by it as if he were the
owner
 It is proof of ownership,
possession or control of goods
 Cash memo, Bill of Lading,
Warehouse keeper’s certificate,
Lorry receipt (L/R), Railway
Receipt (R/R)
Conditions and Warranties

 Stipulations that are essential

for main purpose of contract.
Non-fulfillment of such will mean
loss of foundation of contract.
These are termed as
‘Conditions’.
 Stipulations not essential are
termed as ‘warranty’. Aggrieved
Party may claim damages.
Implied Conditions

 Condition as to title
 Condition of seller : He has right to
sell the goods (title to goods)
 If seller’s title is defective – buyer
may reject
 Condition as to Description
 Goods & Packing should
correspond with the description
given by seller
Implied Conditions

 Condition as to Quality or
Fitness
 Conditions : Buyer makes known
to the seller the purpose, Relies
on skill of seller, Goods are of
description which the seller
ordinarily supplies in the course of
business
 The goods shall be reasonably fit
for such purpose
Implied Conditions

 Condition as to Merchantability
 Goods should be commercially
saleable under the description in
the market at their full value
 Condition as to Wholesomeness
 Incaseof eatables and foodstuff,
Goods must be for human
consumption.
Implied Conditions
 Condition implied by Custom or
Trade Usage
 Conditions in a Sale by Sample
 Isimplied when sample is shown
 Goods to be of the same kind and
quality
 Conditions in a Sale by Sample
as well as by Description
 Goods must correspond with sample
and with description
Implied Warranties
 Implied Warranty of Quiet
Possession
 Ifdisturbed, the buyer may sue the
seller for damages.
 Implied Warranty of Freedom
from Encumbrances
 Shall be free from encumbrance in
favor of any third party not declared
or known to buyer
 If discharge of amount of
encumbrance is required the buyer
is entitled to damages.
Transfer of Property in Goods

 Property : Ownership of Goods

 Possession of Goods : Physical
custody or Control of goods
 Moment when property in goods
passes:
 Ownership

 Risk follows ownership

 Action against third parties

 Suit for price

Essentials of Transfer of
Property
 Goods must be ascertained :
Buyer should have reasonable
opportunity to examine the
goods for the purpose of
ascertaining whether they are in
conformity with the contract.
 Intention to pass Property in
Goods must be there
 Rights of Unpaid Seller
 Where the property in the goods has
passed to the buyer
 Right of Lien
 Right of Stoppage in transit

 Right of Resale.

 Where the property in the goods has not

passed to the buyer
 Right of with holding delivery
 Suit for price

 Suit for damages for non-acceptance

 Suit for damages for repudiation of contract

 Suit for interest

Buyer’s remedies against
Seller for breach of contract
 Suit for damages for Non-
Delivery
 Suit for Price
 Suit for specific performance
 Suit for Breach of Warranty
 Suit for damages for repudiation
of contract before due date
 Suit for Interest