ABSTRACT

In this project we can see the important of essential of contract of sale is a legal contract for
purchase of assets by a buyer from a seller for an agreed upon value in money.A contract of sale
lays out the terms of a transaction of goods or services, identifying the goods sold, listing
delivery instructions, inspection period, any warranties and details of payment. Being familiar
with the terms used in a contract and knowing what to look for will help you avoid problems in
the future and ensure that your best interests are protected.
We are also going to see about the essential elements in a contract of sale. Those are like goods,
transfer of ownership, price other contract essentials, contract sale.
Section 4 of the sale if goods act, 1930 defines “sale” as follows: “A contract of sale of goods is
a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the
property in goods to for the price.”
The consideration for sale of goods must be money, called the price. Where the property in
goods is transferred for any consideration other than money that will not be sale, but an exchange
or barter. In other words, where goods are exchanged for goods, that is not a sale. But where
goods are sold for a definite sum and the price is paid partly in terms of valued up goods and
partly in cash, that is sale. For example, in Aldridge v Johnson case. That you will see in the
following brief.

CONTENTS
Chapter-1
1.1 introduction

1.2 literature review

1.3 scope and objectives
1.4 methology
1.5 research question
1.6 Hypothesis

Chapter-2
2.1bilateral contract
2.2 money consideration
2.3 sale and contract for work and material
2.4 goods
2.5 contract of sale and contract of agency
Chapter-3
3.1 (5) essential elements of a valid sale or a contract of sale
3.2 An offer and acceptance
3.3 goods perishing before making of a contract
3.4 sale and agreement of sale
3.5 Consideration
3.6 contract of sale how made
3.7 Warranties from the seller
Chapter-4
4.1 conclusion
Chapter-1
1.1 Introduction:
The topic is about the essential of sale which sale is a legal contract for purchase of assets by a
buyer from a seller for an agreed upon value in money. A contract of sale lays out the terms of a
transaction of goods or services, identifying the goods sold, listing delivery instructions,
inspection period, any warranties and details of payment. According to Section 4(1) of the Sale
of Goods Act 1930, A 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. There may be a contract of sale
between one part-owner and another. A contract of sale may be absolute or conditional. A
contract of sale of goods is a contract whereby seller transfer or agrees to transfer the property in
goods to buyer for a price. There may be a contract of sale between one partner owner and
another.
Where under a contract of sale the property in the goods is transferred from the seller to the
buyer it is called a sale. But where the of the property in the goods is to take place at the future
time or subject to some condition thereafter to be full filled, the contract is called agreement to
sell. An agreement to sell becomes a sale when the time elaspes or conditions are fulfilled
subject to which the property of the goods is to be transferred.

1.2 scope and objectives:

The main objective of this project is to explain the essential elements of a contract of sale and its
formationWhere under a contract of sale the property in the goods is transferred from the seller
to the buyer it is called a sale. And to show how the elements are implied in a contract of sale,
and in the agreement. And this project is to understand the essential of sale is how functioned.

1.3 Methodology:
This research paper was written under the doctrinal research method and all the references are
taken from the book “law of sale of goods ” and also from some web. By this we can understand
the essential elements of sale.

1.4 research question:

By this project we can understand that:
How the essentials of sale is followed in a contract of sale?
What are the essential elements of sale?
what is the “sale of goods act 1930”?

1.5 Literature review:

In this project we can see the important of essential of contract of sale is a legal contract for
purchase of assets by a buyer from a seller for an agreed upon value in money a contract of sale
lays out the terms of a transaction of goods or services, identifying the goods sold, listing
delivery instructions, inspection period, any warranties and details of payment being familiar
with the terms used in a contract and knowing what to look for will help you avoid problems in
the future and ensure that your best interests are protected, by this project we can understand
what are the formalities that are required to form a contract of sale and the essentials of it this
project explains what are all is required for a sale and in this we went in deep explaining the
essential of sale and the contract of sale and also the warranties and implied warranties the topic
is all about the essential of sale and what are the methods of sale given that we also talk about the
essential elements in a contract of sale those are like goods, transfer of ownership, price other
contract essentials and the topic is about the essential of sale which sale is a legal contract for
purchase of assets by a buyer from a seller for an agreed upon value in money a contract of sale
lays out the terms of a transaction of goods or services, identifying the goods sold, listing
delivery instructions, inspection period, any warranties and details of payment according to
section 4(1) of the sale of goods act 1930, a 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 there may be a
contract of sale between one part-owner and another a contract of sale may be absolute or
conditional a contract of sale of goods is a contract whereby seller transfer or agrees to transfer
the property in goods to buyer for a price there may be a contract of sale between one partner
owner and another .

1.6 Hypothesis:

Chapter-2
2.1 Bilateral contract:
According to pothier the contract of sale is “consensual, bilateral and commutative”. A bilateral
contract is an agreement with two parties in which each side the parties agrees to fulfill his or her
side of the bargain.The bilateral contract is the most common kind of binding agreement. Each
party is both an obligator (a person who is bound to another) to its own promise, and an obligee
(a person to whom another is obligated or bound) on the other party's promise. A contract is
signed so that the agreement is clear and legally enforceable. For example; Any sales agreement
is an example of a bilateral contract. A car buyer may agree to pay the seller a certain amount of
money in exchange for the car. The seller agrees to deliver the car title in exchange for the
specified sale amount. If either party fails to complete one end of the bargain, a breach of
contract has occurred.
Business contracts are almost always bilateral. Businesses provide a product or service in
exchange for financial compensation, so most businesses are constantly entering into bilateral
contracts with customers or suppliers.

2.2 Money consideration:

The consideration for a sale of goods must be money, called the price. Where the property in
goods is transferred for any consideration other than money that will not be sale, but an exchange
or barter . in other words , where goods are exchange for goods, that is not for sale. But where
goods are sold for a definite sum and the price is paid partly in terms of valued up goods and
partly in cash, that is a sale.
Similarly, where corn was delivered on terms that on demand either the price would be paid or a
equal quantity of corn would be returned, that was held for sale. Where an old car is returned to
dealer for a new one and the difference is paid in cash that should also be a sale. Where a
petroleum company distributed coins of special curiosity, but with no money or intrinsic value,
free with four gallons of oil it was not a contract of sale.

2.3 Sale and contract for work and material:

A contract of sale has to be distinguished from a contract involving the exercise of skill or labour
on some material. Apart from the question of liability to sales tax, the distinction is important
because it is only a sale that carries a number of implied conditions and warranties. The dividing
line between the two is not clear. The only conclusion that can be drawn from English authorities
is that every case must be judged of by itself.” There is no infallible test of universal application
for distinguishing between the two types of contracts namely a contract for sale of goods and
contract for work and services.

2.4 Goods:
The subjet matter of contract must be goods. Thh expression goods is thus defined in section 2(7)
of the act
Goods means every kind of moveable property another than claims and money and includes
stocks and shares, growing crops, grass and things attached to or forming a part of the land
which are agreed to be severed before sale or under the contract of sale.
Thus goods include every kind of movable property other than actionable claims and money.
Things like goodwill, copyright, trade mark, patents, water, oil, air, gas, electricity and motor
vehicles.
Money and actionable claimes are excluded from the definition of goods. Import licences called
REP licences or exim scrips have been held to be goods and not actionable claims. Money which
is legal tender is an essential aspect of every sale because the price of goods has to be expressed
in terms of money and therefore “money” itself cannot be the subject of sale is by thief the buyer
will not get a good tittle.

2.5 Contract of sale and contract of agency:

A contract of agency differs essentially form a contract of sale inasmuch as an agent after taking
delivery of the property does not sell it as his own property but sells the same as the property of
the principle and under his instruction and direction further more since the agent is not the owner
of goods if any loss is suffered by the agent he is to be indeminified by the principal. This is yet
to another dominant factor which distinguished an agent from buyer pure and simple.The act
done and representation made by an agent aren’t the act of the agent but arte regarded as the act
of principal. Therefore rights and duties created by agent are the right and duties of the principal.
However some acts relating to personal skill cannot be done through agency.

Chapter-3
3.1 (5) essential elements of a valid contract:
The following are some of the essential elements of a valid sale or a contract of sale.
Essential elements of Valid Sale or Contract of Sale
1. Essential Elements of a Valid Contract
All the necessities of a legitimate settlement which include unfastened consent, attention,
competency of the events, lawful object and consideration ought to be fulfilled. If any of the
critical elements of a legitimate settlement is absent, then the contract of sale will no longer be
valid.
2. Two Parties
Another important detail of a contract of sale is that there must be two events to the contract of
sale viz., vendor and customer. In a contract of sale, the possession of goods has to bypass from
one character to any other. Hence the seller and the client ought to be exceptional individuals
because one person can't be both the client and the vendor. But there are sure exceptions to this –
where a person’s items are sold beneath an execution of decree he might also purchase his own
goods.
3. Goods
There must be some items as a subject-be counted. Goods should be one which is described as
goods in Sec. 2(7) of the Sale of Goods Act. As consistent with the definition given in Sec. 2(7)
of the Act, items method every sort of movable belongings and it includesstock and
proportion,developing plants, grass,the matters attached to or forming part of the land which may
be severed from the land.
4. Transfer of Ownership
In a agreement of sale, ownership over items has to be transferred to the client by means of the
seller or there have to be an settlement to switch the possession by the vendor to the buyer. The
assets in the goods method “all ownership rights” of the products. In a contract of sale, all of the
possession rights of the goods must be transferred with the aid of the vendor to the purchaser.
However, the physical delivery of the goods isn't always required.
5. Price
Another vital detail of a contract of sale is that there have to be a few charge for the products.
That means, the products need to be sold for a few charge. According to Sec. 2(10) of the Sale of
Goods Act, the time period fee means “the money attention for a sale of goods“.

3.2 An offer and acceptance

An offer and acceptance is very important in a sale. It is made through an offer and acceptance in
which without the buyer’s acceptance the contract cannot be made. Therefore the offer and
acceptance is very important in a contract.
For example: Praveen puts a notice of selling his car for 2 lakh and by knowing about the sale
Krishna sends a letter of acceptance to Praveen and therefore it is a valid contract.

3.3 goods perishing before making of a contract:

Where there is a contract for the sale of specific goods, the contract is void if the goods without
the knowledge of the seller have, at the time when the contract was made, perished or become so
damaged as no longer to answer to their description in the contract.

3.4 Sale and agreement of sale:

A contract is formal agreement and is enforceable by law every contract has an agreement and
every contract is not a contract. The section 4 of 1, of the Sale of Goods Act, 1930 states that ‘A
contract of sale of goods is a contract whereby the seller either transfers or agrees to transfer the
property in goods to the buyer for a decided price.’
From the above discussion we can understood that a contract for the sale of goods can either be a
sale or an agreement of sale.

3.5 Consideration:
Consideration is essential for a formation of a contract. The meaning of this is something in
return. It is the price paid to the contract so it must be lawful. A contract without consideration.
In contract of sale the consideration is mandatory.
(i) Importance of consideration:

Consideration is founded at ever a contract is made. The law when came into existence the
consideration also came if a promise is to be enforceable by creating a legal obligations. A
promise without consideration is a void contract.
3.6 Contract of sale how made:
A contract of sales is a formal contract which contains all terms and conditions in the written
form related to a sale. This contract is the agreement between a seller to sell and buyer to buy at
an agreed price.A contract of sales is also referred to as sales’ contract, agreement of sales, or
contract of agreement. A contract of sale is made in written form so that there is no scope of
contradiction later. In the old times, Handshakes were used at the place of the contract of sales.
Deals made through handshakes is known as “Oral contracts.” Because of various flaws in the
oral contract, it is replaced with a sales contract or contract of sale. In an oral contract, a
misunderstanding takes place because of the lack of clear records.
A seller can take back the goods provided if buyer fails to make the payment under the
resolutory condition, as a contract of sales is subject to resolutory conditions.

3.7 warranties from a seller:

In the context of the sale of goods, a WARRANTY is concerned with figuring out the kind and
fine of the products which can be tendered via the vendor. The simple forms of warranties are
express warranties and implied warranties. An express warranty is any representation or
affirmation approximately the goods made via the seller's phrases or behavior. For instance, the
outline of the goods inside the sales agreement constitutes an express assurance that the goods
will conform to the outline.
Implied warranties are warranties which might be shown to dealers by regulation. A guarantee of
merchantability is implied in each income agreement. This assurance is a promise that the
products bypass without objection inside the exchange, are effectively packaged, agree to all
guarantees or affirmations of fact on the container, and are in shape for the normal functions for
which such goods are used. The IMPLIED WARRANTY of merchantability additionally
includes a promise that multiple items could be of even kind and best.

Chapter-4
4.1 conclusion:
By this project we can understand what are the formalities that are required to form a contract of
sale and the essentials of it this project explains what are all is required for a sale and in this we
went in deep explaining the essential of sale and the contract of sale and also the warranties and
implied warranties the topic is all about the essential of sale and what are the methods of sale.
We also talk about the essential elements in a contract of sale. Those are like goods, transfer of
ownership, price other contract essentials.