Section 5

Contract of sale may be made in writing or by word of mouth or partly in writing & partly by word of mouth or may be implied from conduct of parties or from course of dealings between the parties. Contract made in any of following ways: 1. offer& acceptance is necessary 2. immediate delivery or in installments 3. immediate payment or in installments 4. goods may be existing or future goods 5. must have all essentials of ordinary contract
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The possession of goods passes to buyer who promises to pay price of goods in certain installments . Unless full price is paid the ownership of goods remain with the seller. Hirer becomes the possessor of goods immediately & he has an option to return the goods. If there is no such option existing, the agreement would be an agreement to sell not hire purchase agreement even though payment are made by installments. Mere payment in installments not make it hire purchase one. Hire purchase agreement is regulated by Hire Purchase Act, 1972.

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Goods perishing before making of a contract, contract is void if without knowledge of seller goods perished, goods must be specified goods & goods become so damaged as no longer to answer their description in contract.{sec 7} Goods perishing before sale but after agreement to sell, such an agreement is avoided. But goods must be specified , goods become so damaged as no longer to answer their description in contract, without any fault on part of seller or buyer.{sec 8}

Price, means money consideration for sale of goods. Price is integral part of contract of sale. If it is not fixed or not capable of fixed , the whole contract is void ab-initio. Acc. To section 9 price may be: 1) fixed by contract 2)may be agreed to be fixed in the manner provided by contract {by valuer} . 3) determined by course of dealings between the parties 4) if price is not to be fixed by above ways buyer is bound to pay reasonable price.

Section 12(2) defines condition as a stipulation essential to main purpose tom contract, the breach of which give rise to treat contract as repudiated.(quality of goods) Section 12(3) warranty is stipulation subsidary to main purpose of contract breach of which give rise to claim of damages but not to reject the contract(time of payment) Whether stipulation in a contract is condition or warranty depends in each case on construction of contract.

Essential to main purpose of contract Right to sue for damages and repudiate the contract Breach of condition may be treated as breach of warranty in certain circumstances( waiver of condition)

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Subsidiary to main purpose of contract Right to sue only for damages Breach of warranty cannot be treated as breach of condition

Condition

Warranty

These may be of kind that party choose to agree upon e.g, buyer cannot sell the goods below stipulated price, delivery shall be made on or before certain date.

Implied conditions and warranty are deemed to be incorporated every contract of sale of good unless terms of contract shows the contrary intention. The following are implied conditions: 1. Condition as to title(sec 14) A, purchased a care from B who had no title to it. A used the car for several months. After that true owner spotted the car and demanded it from A.
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2. Sale by description(sec 15): where there is contract for sale of goods by description there is an implied condition that goods shall corresponds with the description. If that sale is by sample as well as description goods must corresponds to both. Car is sold as new car buy buyer finds it used one. Buyer may reject the car or retain the car but claim for damages.

3. Conditions as to quality or fitness: as a general rule the buyer is supposed to satisfy himself about quality of goods he purchases & he is also charged with himself the responsibility of seeing for himself the goods suits the purpose for which he buys them. Later on if goods do not suit the purpose the seller cannot be asked to compensate. Exceptions: # buyer disclose the purpose #buyer must have relied on sellers skill or judgment # sellers business must be to sell such goods

In food articles there is an implied condition that articles are fit for human consumption. 4. Merchantable quality: It means it must be saleable in market under denomination mentioned the quality should be such that reasonable men would accept the article as performance of promise. Seller would not be held liable if certain facts are concealed from him & unsuitability arises because of those facts
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5. Sale by sample: a contract of sale is contract of sale by sample where there is term in contract express or implied to that effect. Thus it cannot be assumed that in all cases where sample is shown sale is by sample. In case of sale by sample: # bulk to correspond with sample #buyer have reasonable opportunity to compare the bulk with sample #goods to be of merchantable quality

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Warranty of quiet possession Warranty of freedom from encumbrances.

Caveat Emptor is fundamental principle of sale of goods. It means caution buyer i.e. let the buyer beware. It is no part of seller duty to point out defect in his own goods. The buyer must inspect the goods to find out if they suit his purpose.

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Exceptions of caveat emptor: 1. seller makes false representation 2. seller actively conceals defects in the goods so that it could not be discovered on examination 3. buyer makes known to seller his purpose of buying goods