CHAPTER 2

DEFINITIONS AND ESSENTIALS OF SALE

In this Chapter

1. Short title, extent and commencement [S. 1]

2. Definitions of-[S. 2]

(i)Buyer and Seller

(ii)Delivery

(iii)Documents of Title to Goods

(iv)Bill of Lading

(v)Dock Warrant

(vi)Warehouse Keeper's Certificate

(vii)Delivery Order

(viii)Railway Receipts

(ix)Multimodal Transport Document

(x)Goods

Relevant Cases

1.Tata Iron & Steel Co. Ltd., Bombay v. S.R. Sarkar, MANU/SC/0270/1960 : AIR 1961 SC
65.

2.JV Gokal & Co. v. Assistant Collector of Sales Tax, MANU/SC/0269/1960 : AIR 1960 SC
595.

3.Morvi Mercantile Bank Ltd. v. Union of India, MANU/SC/0064/1965 : AIR 1965 SC 1954.

Section 1 of the Act gives short title, extent and commencement of the Act as follows:-

1. Short title, extent and commencement.-

(1) This Act may be called the Sale of Goods Act, 1930.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on the 1st day of July, 1930.

Section 2 gives definitions of different terms which would be used in coming chapters
of this book-

2.Definitions.-

In this Act, unless there is anything repugnant in the subject or context,-

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 (1)"buyer" means a person who buys or agrees to buy goods;

(2)"delivery" means voluntary transfer of possession from one person to

another;

(3)goods are said to be in a "deliverable state" when they are in such state
that the buyer would under the contract be bound to take delivery of them;

(4)"document of title to goods" includes a bill of lading, dock-warrant,

warehouse keeper's certificate, wharfingers' certificate, railway receipt,
multimodal transport document, warrant or order for the delivery of goods and
any other document used in the ordinary course of business as proof of the
possession or control of goods, or authorising or purporting to authorise, either
by endorsement or by delivery, the possessor of the document to transfer or
receive goods thereby represented;

(5)"fault" means wrongful act or default;

(6)"future goods" means goods to be manufactured or produced or acquired

by the seller after the making of the contract of sale;

(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 the contract of sale;

(8)a person is said to be "insolvent" who has ceased to pay his debts in the
ordinary course of business, or cannot pay his debts as they become due,
whether he has committed an act of insolvency or not;

(9)"mercantile agent" means a mercantile agent having in the customary

course of business as such agent authority either to sell goods, or to consign
goods for the purposes of sale, or to buy goods, or to raise money on the
security of goods;

(10)"price" means the money consideration for a sale of goods;

(11)"property" means the general property in goods, and not merely a special
property;

(12)"quality of goods" includes their state or condition;

(13)"seller" means a person who sells or agrees to sell goods;

(14)"specific goods" means goods identified and agreed upon at the time a
contract of sale is made; and

(15)expressions used but not defined in this Act and defined in the Indian
Contract Act, 1872 (9 of 1872), have the meanings assigned to them in that
Act.

Now, here we can explain the terms what constitute section 2 of the Act-

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 2(i) Buyer and Seller

When there is a deal to sell something then the existence of two parties
i.e. buyer and seller can't be denied. Both the terms i.e., buyer and
seller are complementary to each other representing two parties to a
contract of sale.

2(ii) Delivery

In the section 'delivery' has been defined as 'voluntary transfer of

possession from one person to another'. Sir Frederick Pollock1 says
that "in all cases the essence of delivery is that the deliverer, by some
apt and manifest act, puts the deliveree in the same position of control
over the thing, either directly or through a custodian, which he held
himself immediately before that act."

2(iii) Documents of Title to Goods

In the case Tata Iron & Steel Co. Ltd., Bombay v. S.R. Sarkar,
MANU/SC/0270/1960 : AIR 1961 SC 65, it was observed that the test
to determine whether a document is document of title in question is
used in the ordinary course of business as proof of possession or
control of goods or authorising or purporting to authorize either by
endorsement or delivery of the document to the possessor to receive
the goods thereby represented.

2(iv) Bill of Lading

Bill of Lading has been defined in Scrutton on Charterparties2 as a

receipt for goods shipped on board a ship, signed by the person who
contracts to carry them, or his agent, and stating the terms on which
the goods were delivered to and received by the ship. The editor has
further added that-'It is not the contract, for that has been made before
the Bill of Lading was signed and delivered, but it is, excellent evidence
of title terms of the contract. In another case JV Gokal & Co. v.
Assistant Collector of Sales Tax, MANU/SC/0269/1960 : AIR 1960 SC
595, it was said that a bill of lading is a writing, signed on behalf of the
owner of the ship in which goods are embarked, acknowledging the
receipt of the goods and undertaking to deliver them at the end of the
voyage subject to such conditions as may be mentioned in the bill of
lading. It is well-settled in commercial world that a bill of lading
represents the goods and a transfer of it operates as a transfer of the
goods."

2(v) Dock Warrant

A dock or wharf owner issues a dock warrant (a document) on

merchant's request in which details are given regarding weights or
measurements of a specific parcel of goods. The dock warrant also
certifies that the goods are held to the order of the person named.

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 2(vi) Warehouse-Keeper's Certificate

A certificate in which certain goods are specified, is known as

warehouse-keeper's or a wharfinger's certificate. It is issued by the
warehouse-keeper orwharfinger.

A warehouse-keeper or a wharfinger is a person who owns a wharf for

the purpose of receiving merchandise with a view for its shipping and
transactions in exchange of a rate of payment.

2(vii) Delivery Order

When a person who is the owner of goods gives an order to another

person who is in possession of goods, orders to deliver it to a person
whose name is given in the order. It must, however, be a document
which represents the goods. It is a fact that without delivery of goods,
a contract cannot be completed, use of term 'delivery order' has
different sense depending upon construction of each case. It may be
used to refer to an order directing a person in possession to deliver the
goods to a person whose name has figured in orders and also to refer
to an order addressed to a person who is not in possession of goods but
expecting to get possession or control over them.

2(viii) Railway Receipts

The Railway company issues a receipt i.e. a document containing the

details of goods that it has to be given by the consignee at the
destination of the goods in return of delivery of goods named therein.
In the case Morvi Mercantile Bank Ltd. v. Union of India,
MANU/SC/0064/1965 : AIR 1965 SC 1954, it was observed that a valid
pledge can be made by the owner by transferring the railway receipt
representing the said goods.

If a consignor is unable to take the delivery himself then he must

endorse on the receipt a request for delivery to the person to whom he
intends it to be delivered.

2(ix) Multimodal Transport Document

'Multimodal Transport Document' was inserted by the Act 28 of 1993.

Section 31 and Schedule, Part III. The Act came into force on 2nd April,
1993. The Act empowered to regulate the multimodal transportation of
goods, from any place in India to a place outside India, on the basis of
a multi-modal transport contract and for matter incidental thereto. In
the section 2(k),multi-modal transportation defined as-'carriage of
goods by two or more modes of transport from the place of acceptance
of the goods in India to a place of delivery of the goods outside India'.

2(x) Goods

In the Sale of Goods Act, 1979, section 61 and section 18 of the Supply of
Goods and Services Act, 1982 defines goods as-"all personal chattels other

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 than things in action and money". The term goods is of very general and
indefinite import, and primarily derives its meaning from the context in which
it is used.

Section 3: Application of provisions of Act IX of 1872.-The unrepealed

provisions of the Indian Contract Act, 1872, save in so far as they are
inconsistent with the express provisions of this Act, shall continue to apply to
contracts for the sale of goods.

© Universal law Publishing Co.

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