Sale of Goods Act 1930

Submitted by:Anshul Khandelwal (B-012) Vinamra Khemuka (B-013) Dipesh Patel (B-026) Monank Patel (B-027) Akash Sharda (B-037) Siddharth Shinde (B-040)

INTRODUCTION
Initially, this was part of Indian Contract Act.

In 1930 separate Sale of Goods Act was passed.

Sale of Goods Act is an old mercantile law Deals only with sale of movable goods

Contract of Sale
A contract whereby the seller transfer or agrees to transfer the property in goods to the buyer for a price. Essentials
Two parties Goods Transfer of ownership Price All essentials for a valid contract of sale Includes both a sale and agreement to sell.

SALE
Definition

AGREEMENT TO SELL

Where the property in Where the transfer in property goods is immediately is to take place at a future time transferred from the seller or subject to the fulfillment of to the buyer, the contract is certain conditions, the called as a sale contract is called an agreement to sell.

Transfer of Ownership
Nature Of Contract Nature of Rights of Buyer Breach by Buyer Risk of Loss Insolvency of Seller Insolvency of Buyer

YES
Excecuted Jus in Rem Seller can sue for price Buyer Buyer can claim the good

NO
Excecutory Jus in Personam Seller can sue for damages Seller

Buyer can claim only money paid Seller must deliver the May refuse to sell the good goods and is entitles for the unless full price was paid unpaid price

Classification of Goods
Goods- every kind of movable property, other than
actionable claims and money. It includes stock, shares, growing crop, grass and things attached to or forming part of land. Existing goods
Specific Ascertained Unascertained

Future goods Contingent goods

 Existing goods that are physically present at the time of sale.

Specific: Goods identified and agreed upon at the time of making the contract of sale are specific goods. Ascertained: The goods that have been ascertained or identified subsequent to the formation of the contract of sale. It basically involves unconditional appropriation of the goods. Unascertained: The goods that are not specifically identified or ascertained at the time of entering the contract of sale. They are identified or defined only by description.

 Future Goods- To be manufactured, produced or acquired after making of the contract. Ex. Sale of Customized machines

Contingent Goods- They are a kind of future goods the acquisition of which depends on an uncertain contingency. Ex. A agrees to sell a machine to C only if B sell it to A.

Price
Price means the money consideration for a sale of goods. In simpler words, price is the quantity of payment or compensation given by one party to another in return for goods or services. Modes of fixing the price
Price expressly fixed in the contract itself Price fixed by the valuation by third party

 Price expressly fixed in the contract itself: The price in a contract of sale may be expressly fixed by the parties themselves. Price fixed by the valuation of a third party: When there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party.

Bailment
Bailment- A transaction in which goods are delivered by one person to another person for a specific purpose upon a contract that they will be returned or disposed after the purpose is accomplished. Difference between sale and bailment.
Title and position Return of goods Right to goods Act applicable section 148(bailment),

Hire-Purchase
Hire-Purchase - A contract of hiring under which owner delivers his good on lease to a person and also gives hirer an option to purchase the goods at the end of hiring period. Difference between sale and Hire-Purchase
Transfer of ownership Right to terminate the contract Mode of Contract Act Applicable Insolvency of the buyer

Condition
A stipulation essential to the main purpose of the contract the breach of which gives rise to a right to treat the contract as repudiated.

Kinds of Condition
Expressed Implied

 Expressed Condition- Any condition that has been expressly provided by both the parties at time of sale.
Parties can include any number of expressed condition. For ex. If A desires to buy a 15 laptop then the screen size is an expressed condition.

Implied Condition Condition as to title Condition as to description and/or sample Condition as to wholesomeness

Warranties
It is a stipulation collateral to the main purpose of contract. The breach of which gives rise to claim for damages but not a right to treat the contract as repudiated.
Kinds of warranties Expressed warranties Implied warranties
Implied warranties of quiet possession Implied warranty of freedom from encumbrances Disclosure of Dangerous Nature of Goods

CONDITION
Nature effect of breach Importance It is essential to the main purpose of the contract Agrieved party can repudiate the contract

WARRANTY
It is a collateral to the main purpose of the contract Agrieved party can claim the damages

Vital part for completion of contract

Breach of condition can be treated as breach of warranty if the agrieved part agrees

The contract can be completed even if warranty is not completed

Treatment

Breach of warranty can not be treated as breach of Condition

Example

A tells B that he wants to buy a A at the time of selling his car to B car which is capable of making tells him that it is capable of a speed of 150 k/p/h, but if it making a speed of 150 k/p/h. is found that the car does not After purchased the car that it can make a speed of 150 k/p/h, A keep up hardly 100k/p/h, the can repudiate the contract breach of the representation by the seller amounts to a breach of warranty.

Doctrine of caveat emptor

Caveat emptor means buyer be aware. Buyer is expected to be careful while purchasing the goods and seller is not liable for any defects in goods sold by him. Under of Sale of Goods Act and any other law, there is no implied condition or warranty as to quality or fitness of goods for any particular purpose. Exceptions 1. False representation by seller amounting to fraud. 2. Buyer relying upon the skill of the seller Priest v. Last. 3. Goods supplied do not correspond to the sample

Rights of Unpaid Seller

A seller is unpaid when: Goods have been sold and price is overdue. Full price has not been paid or tendered to seller. Negotiable instrument are conditional or have been dishonored.

Rights of an unpaid seller are classified as:Rights against the goods Rights against the buyer

Rights against the Goods

Right of lien or retention Right of stoppage of goods in transit Rights of resale Right to withhold delivery

Rights against the Buyer

Suit For Price Suit for damages for non acceptance Suit for damages for repudiating contract before due date Suit for interest and special damages

Buyers Right against the Seller

Suit for damages for non delivery Suit for specific performance Suit for damages for breach of warranty Suit for damages for Rescission of contract before due date Suit for recovery of price along with interest

AUCTION SALE
Public event at which goods are sold to the person who offers the highest price(bid). Rules Regarding Sale by Auction: Each lot of goods is separate sale of contract Sale is completed by the fall of hammer Puffer Sale may be notified to be subject to reserve price Right to bid may be reserved expressly by or on behalf of the seller. Auctioneer can sell on behalf of seller, has no knowledge of defect in title & can give quiet possession of goods on payment of price.

Transfer of Ownership
Significance
Risk Prima Facie passes with ownership
Ex. A hires a van from B, which accidently catches fire. The loss would be borne by B

Action against third party Suit for price Insolvency of buyer and seller

 Rules Regarding transfer of ownership

Transfer of ownership in ascertained goods Transfer of ownership in unascertained goods Transfer of ownership in goods sent on approval or on sale or return basis

Transfer of ownership in ascertained goods

The ownership transfer if the following conditions are satisfied
Goods are specific Contract is unconditional Goods are in deliverable state

 Transfer of ownership in unascertained goods The ownership does not pass unless the following conditions are fulfilled
Ascertainment of goods Their appropriation to the contract

Transfer of ownership in goods sent on approval or on sale or return basis The ownership transfer under the following conditions
The buyer signifies the approval to the seller The buyer does not retains the goods without informing the seller, then on expiration of reasonable time the ownership transfers to the buyer

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